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On Wednesday, DA Davidson adjusted its outlook on First Busey Corporation (NASDAQ:BUSE), lowering the price target from the previous $28.00 to $25.00, but maintained a Neutral rating on the stock. Currently trading at $23.62, InvestingPro analysis suggests the stock is undervalued, despite six analysts recently revising their earnings expectations downward. The adjustment follows the observation of several less favorable trends in the fourth quarter of 2024, including a step back in Net Interest Margin (NIM), loan runoff, and a lift in non-performing assets (NPA).
The firm’s analyst noted that despite these trends, there is an expectation of improvement on each front early in 2025. The anticipated positive impact is partly due to the expected completion of the acquisition of CrossFirst Bankshares, Inc. (NASDAQ:CFB) in early March, which is predicted to benefit First Busey’s financial results through solid execution and integration. The company’s strong financial foundation is evidenced by its impressive 37-year streak of consistent dividend payments, currently yielding 4.26%.
The revision in First Busey’s price target is also influenced by a more conservative outlook on Net Interest Income (NII). The analyst’s comments suggest a cautious stance, taking into account the current financial performance indicators that have led to a trimmed earnings per share (EPS) forecast.
First Busey’s stock rating remains Neutral as the firm awaits the actualization of the expected improvements and the successful integration of CrossFirst, which could potentially enhance the company’s financial standing and performance in the near future. InvestingPro data shows the company maintains a GOOD Financial Health Score, with particularly strong metrics in cash flow and relative value. Subscribers can access additional insights and detailed financial metrics to better evaluate the company’s prospects.
In other recent news, First Busey Corporation has announced an increase in its quarterly cash dividend by 4.2%, raising it to $0.25 per share. This development suggests the company’s stable financial position. In addition to this, the company has attracted attention from DA Davidson, who have maintained a neutral rating on First Busey’s stock but revised their price target downwards to $26.00. The analysts attributed this decision to lower loan balances at the start of the year.
Moreover, First Busey Corporation has reported stable earnings, primarily driven by clean credit. The firm’s solid asset quality trends allowed for a reduction in provision expenses, compensating for stagnant spread income figures. According to DA Davidson, First Busey’s growth engine is expected to gain momentum in 2025, with fee income diversity contributing positively to the company’s financials. These are among the recent developments shaping First Busey Corporation’s financial landscape.
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