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On Wednesday, DA Davidson increased its price target for Preferred Bank (NASDAQ:PFBC) shares to $101 from $98, while maintaining a Neutral rating on the stock. Currently trading at $88.98, InvestingPro analysis indicates the stock is slightly overvalued. The firm’s analysts cited a strong quarterly performance with higher-than-expected net interest income (NII) and net interest margin (NIM), which they believe supports an improved earnings per share (EPS) outlook for the future, with current diluted EPS at $9.64.
The analysts noted, however, that there might be slight additional NIM pressure that could affect the first quarter. Despite robust loan production, loan growth was sluggish this quarter due to a rise in payoff levels compared to the third quarter. The bank maintains strong fundamentals with a healthy debt-to-equity ratio of 0.22 and a market capitalization of $1.17 billion.Discover more insights about Preferred Bank with InvestingPro, which offers additional ProTips and comprehensive financial analysis.
The maintained Neutral rating reflects the analysts’ balanced view on Preferred Bank’s stock, despite the positive elements such as solid quarterly results and a favorable EPS forecast. The increased price target to $101 indicates a modest optimism about the bank’s financial prospects based on the recent performance. Notable strengths include a consistent dividend history, having maintained payments for 12 consecutive years with a current yield of 3.42%.
Preferred Bank’s recent quarter showcased a mixed financial picture, where certain metrics exceeded expectations while others, like loan growth, showed signs of deceleration. The analysts’ commentary suggests that while the bank is on a positive trajectory regarding NII and NIM, the increased payoff levels may pose a challenge to sustained loan growth in the near term.
DA Davidson’s revised price target and continued Neutral rating provide investors with an updated perspective on Preferred Bank’s stock value, taking into account the latest financial data and future expectations regarding the bank’s performance.
In other recent news, Preferred Bank reported its fourth-quarter 2024 earnings, missing the expected earnings per share (EPS) of $2.35 by reporting an EPS of $2.25. However, the bank surpassed revenue forecasts by reporting revenue of $72.81 million, exceeding the forecast of $69.54 million. Other recent developments include the planned opening of a new branch in Manhattan and a continued focus on treasury investments and stock repurchases. The bank’s performance in 2024 was robust, with a full-year net income of $131 million, translating to $9.64 per share. Despite the EPS miss, Preferred Bank’s strategic direction and future prospects have been met with investor confidence. Looking ahead, the
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