DA Davidson cuts Simmons First stock target to $19

On Monday, DA Davidson analyst Gary Tenner adjusted the price target for Simmons First National (NASDAQ:SFNC) stock, reducing it to $19.00 from the previous $23.00. Despite the change, the firm maintained a Neutral rating on the bank’s shares. According to InvestingPro data, the stock has declined over 20% year-to-date, though its price-to-book ratio of 0.62 suggests potential undervaluation. For deeper insights into SFNC’s valuation metrics and growth potential, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro. Tenner noted that the first quarter results for Simmons First National were impacted by a larger than expected provision due to the reclassification of two loans to nonaccrual status. However, he mentioned that other credit metrics for the bank remained stable. Despite these challenges, InvestingPro data shows the company maintains strong dividend credentials, having sustained dividend payments for 52 consecutive years with 13 years of consecutive increases.

The analyst expressed expectations that Simmons First National’s net interest margin (NIM) would continue to expand, citing improvements in the deposit mix and new loan production that is anticipated to yield above the current portfolio. Tenner’s outlook for the bank includes the possibility of additional bond sales, which could be used to leverage excess capital towards enhancing the bank’s profitability.

The report further suggests that Simmons First National might prioritize strategies to improve its financial outlook over share repurchases. The revised price target of $19.00 reflects these considerations and the impact of the first quarter’s larger provision on the bank’s financial performance.

Simmons First National has not made any public statements regarding the analyst’s comments or the revised price target at this time. The bank’s stock performance following the announcement will be observed by investors and market watchers alike. The current Neutral rating indicates that DA Davidson does not recommend either buying or selling the stock at this time, but rather suggests a wait-and-see approach.

In other recent news, Simmons First National Corporation reported its first-quarter 2025 earnings, revealing a shortfall in earnings per share (EPS) expectations. The company posted an EPS of $0.26, falling short of the forecasted $0.358, while revenue slightly exceeded expectations at $209.58 million against the forecasted $209.14 million. Despite the EPS miss, the company’s pre-provision net revenue per share exceeded expectations, and the commercial loan pipeline reached its highest level since the second quarter of 2022. DA Davidson maintained a Neutral rating on Simmons First National with a steady price target of $23.00, acknowledging the company’s generally positive performance during the quarter despite the EPS miss. The firm noted that Simmons First National’s net interest income is expected to increase by 5% to 7% over the year. Non-interest income rose by 6% quarter-over-quarter, and the bank’s net interest margin increased to 2.95%. The company is optimistic about achieving over 3% positive operating leverage for 2025 and anticipates crossing a 3% net interest margin sooner than expected. These developments reflect Simmons First National’s strategic focus on deposit optimization and managing credit provisions amid challenging market conditions.

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