DA Davidson lifts FBIZ stock target to $60; maintains buy rating

On Monday, DA Davidson, a financial research firm, increased its price target for First Business Financial Services (NASDAQ:FBIZ) shares to $60.00, up from the previous target of $57.00. The firm also reiterated its Buy rating for the company’s stock. The stock has shown remarkable momentum, currently trading at $53.20, near its 52-week high of $52.98, with an impressive 50.5% return over the past year. According to InvestingPro analysis, the stock appears to be trading above its Fair Value.

The adjustment comes after a thorough analysis of the company’s financial performance. DA Davidson highlighted several factors contributing to the positive outlook. The firm acknowledged that while First Business Financial Services benefited from a few favorable conditions recently, there is a strong belief that the company’s core growth and operating efficiency have the potential to improve. InvestingPro data reveals the company has maintained dividend payments for 20 consecutive years and raised them for 12 straight years, demonstrating consistent financial strength. Want to discover more insights? InvestingPro offers 10+ additional tips about FBIZ’s performance.

The analysts at DA Davidson are confident that First Business Financial Services can achieve a return on assets (ROA) of 1.20% and a return on tangible common equity (ROTCE) of 15%. Current data shows the company is meeting these targets, with ROA at 1.2% and return on equity at 14%. They also noted that the company’s tangible book value (TBV) growth has been among the best within their coverage universe.

The research firm’s forecast is based on the expectation that asset quality issues will remain isolated incidents, posing limited risks to the bank’s ability to maintain high profitability metrics. The analysts stated, "Should asset quality bumps remain isolated, there are limited threats to FBIZ maintaining superior profitability metrics, in our view."

In their report, DA Davidson also mentioned an increase in their earnings per share (EPS) forecast for First Business Financial Services, which contributed to the decision to raise the price target. The firm’s analysts appear confident in the bank’s financial strategy and its potential for continued strong performance.

The updated price target and maintained Buy rating reflect DA Davidson’s optimistic stance on First Business Financial Services’ stock, suggesting a positive outlook for the company’s financial future. The company currently trades at an attractive P/E ratio of 10x, with analysts forecasting EPS of $5.52 for fiscal year 2025, representing continued growth potential.

In other recent news, First Business Financial Services has been the focus of an updated outlook from Keefe, Bruyette & Woods, a financial services specialist. The firm has raised the price target for First Business Financial Services to $60, up from $58, while retaining an Outperform rating. This adjustment follows a period of strong performance by the company, with recent earnings surpassing estimates.

First Business Financial Services reported earnings per share of $1.43, exceeding projected figures due to higher revenues. The company’s revenue growth was 6.57% over the last twelve months, demonstrating robust operational execution. Key factors contributing to this success were substantial gains from Small Business Administration loan sales, which boosted fee income.

Keefe, Bruyette & Woods analyst DelMonte has expressed optimism about the company’s direction, citing a stable core margin and a target for 10% loan growth. The analyst also anticipates continuing growth in fee income, expected to more than offset the costs associated with business investments. As a result of these developments, earnings estimates for First Business Financial Services for 2025 and 2026 have been revised upward by 2% and 4% respectively.

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