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Investing.com - Citi has raised its price target on BankUnited (NYSE:BKU) stock to $42.00 from $38.00 while maintaining a Neutral rating on the shares. The bank, currently valued at $2.97 billion, trades at a P/E ratio of 11.37x. According to InvestingPro analysis, BKU appears to be trading above its Fair Value.
The price target increase follows BankUnited’s second-quarter results, which Citi noted were "a little bit better than expected." The bank’s performance was highlighted by solid net interest margin (NIM) expansion, a positive outlook, a share repurchase announcement, and improved fee income. The company has demonstrated strong momentum with revenue growth of 11.13% over the last twelve months.
Citi pointed to some credit-related concerns in the results, though characterized these issues as "not draconian in nature." The firm increased its earnings per share outlook based on both NIM and pre-provision net revenue (PPNR) improvements. Despite these concerns, BankUnited maintains a strong dividend track record, having raised dividends for 5 consecutive years with a current yield of 3.14%. InvestingPro subscribers can access 8 additional key insights about BKU’s financial health and growth prospects.
The analyst noted that BankUnited’s recently announced CFO transition planned for later this year likely reduces the odds of the bank engaging in any merger and acquisition activity in the near term. This comes amid what Citi described as "recent M&A chatter across the regional bank sector" that had pushed BKU shares higher ahead of the earnings release.
Citi cautioned that its loan loss provision expense estimates "could be too conservative if credit blips percolate" in the second half of 2025.
In other recent news, BankUnited reported its second-quarter 2025 financial results, surpassing market expectations. The company achieved an earnings per share of $0.91, exceeding the projected $0.79. Revenue also outperformed forecasts, reaching $273.93 million compared to the anticipated $267.05 million. In a separate development, Piper Sandler downgraded BankUnited’s stock rating from Overweight to Neutral. Despite the downgrade, Piper Sandler raised the price target for BankUnited to $43.00 from $41.00. The downgrade follows the bank’s approximately 12% outperformance since the early March pullback in bank stocks. These recent developments highlight significant financial achievements and adjustments in analyst perceptions for BankUnited.
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