DA Davidson holds Northwest Bancshares stock at $13 target

On Wednesday, DA Davidson maintained a Neutral stance on Northwest Bancshares, Inc. (NASDAQ:NWBI) with a consistent price target of $13.00. The financial institution’s performance showcased a core Pre-Provision Net Revenue (PPNR) that surpassed expectations due to a stronger Net Interest Income (NII) and controlled Operating Expenses (OpEx). Trading at a P/E ratio of 14.03 and offering a substantial 6.33% dividend yield, the bank has maintained dividend payments for 31 consecutive years. The earnings per share (EPS) also exceeded forecasts, not relying on a significant non-accrual loan (NAL) interest recovery.Want deeper insights? InvestingPro analysis reveals 7 additional key metrics and tips about Northwest Bancshares’ financial health and growth potential.

Northwest Bancshares’ shares have remained steady compared to the KBW Regional Banking Index (KRX) since the company reported its earnings, showing a modest -1.12% return year-to-date (YTD). With a beta of 0.66, the stock has demonstrated lower volatility than the market. DA Davidson has increased its 2026 earnings estimate, citing an improved core Net Interest Margin (NIM) excluding NAL interest recovery, which compensates for the weaker projections in loan and fee income growth. According to InvestingPro data, the stock appears undervalued compared to its Fair Value.

The bank has made notable strides in its commercial lending efforts, particularly in Commercial & Industrial (C&I) lending, which saw a 14% quarter-over-quarter (Q/Q) increase. Additionally, there was a 6 basis point improvement in the core NIM. Despite these advancements, DA Davidson believes the stock is fairly valued when considering price-to-earnings (P/E) and price-to-tangible book value (P/TBV) ratios in relation to the supported return profiles. The firm anticipates a 2026 PPNR return on average assets (ROAA) of approximately 1.7% and a return on tangible common equity (ROTCE) around 15%.

The analysis concludes that given the limited potential for stock price growth towards their price target, the Neutral rating is reaffirmed.

In other recent news, Northwest Bancshares reported impressive first-quarter 2025 financial results, exceeding analyst expectations. The company achieved an earnings per share (EPS) of $0.35, significantly surpassing the forecasted $0.24, and reported revenue of $156.17 million, which also exceeded the anticipated $142.16 million. This strong performance included a 48% year-over-year increase in net income, reaching $43 million. In addition to the robust earnings, Northwest Bancshares is preparing for a merger with Penns Woods, expected to close in late July, which will position the company among the top 100 U.S. banks by assets. The merger has received all necessary regulatory approvals, and integration activities are underway. In leadership changes, Timothy M. Hunter has been appointed as the new Non-Executive Chairman, following Timothy B. Fannin’s decision to step down. The company continues to focus on strategic growth, including a shift towards commercial lending and new branch openings. Lastly, the firm remains cautiously optimistic about its commercial loan pipelines, with expectations of Federal Reserve rate cuts later in the year.

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