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Investing.com - DA Davidson lowered its price target on Civista Bancshares (NASDAQ:CIVB) to $26.00 from $27.00 on Monday, while maintaining a Buy rating on the Ohio-based bank. The $403 million market cap bank currently trades at a P/E ratio of 9.6x, with InvestingPro analysis indicating the stock is fairly valued.
The price target reduction follows Civista’s announcement of an acquisition and capital raise, which triggered a 13.7% drop in the company’s share price, matching the 14% discount offered in the capital raising. Despite the recent decline, the bank has maintained its impressive 14-year streak of consecutive dividend increases, currently offering a 3.2% yield.
Despite the lower target, DA Davidson believes the moves will drive a stronger growth trajectory for Civista due to improved funding and right-sized capital, providing a clearer path to exceeding $6 billion in assets.
The firm highlighted Civista’s deposit franchise as a particular strength, noting its 1.5% core deposit costs, along with rebounding profitability and enhanced growth prospects that are expected to offset earnings per share dilution by 2027.
DA Davidson sees 21% upside potential to its new price target and considers Civista undervalued at 1.1 times 2026 estimated price-to-tangible book value, compared to 1.4 times for its peers in the KRX index.
In other recent news, Civista Bancshares reported strong financial results for the first quarter of 2025, with earnings per share (EPS) reaching $0.66, surpassing the forecasted $0.51, marking a 29.4% surprise. Revenue also exceeded expectations slightly, coming in at $40.63 million against a forecast of $40.33 million. The company announced a definitive merger agreement to acquire The Farmers Savings Bank in a cash and stock transaction valued at approximately $70.4 million, which is expected to close in the fourth quarter of 2025. This acquisition will expand Civista’s presence in Northeast Ohio, adding two branches and significant deposits and loans to its portfolio.
Additionally, Civista has launched an underwritten public offering of its common shares, with Piper Sandler & Co. as the sole book-running manager, intending to use the proceeds for general corporate purposes. Analysts from Stephens have raised the price target for Civista Bancshares to $25 from $24, following the bank’s notable performance and improvements in net interest margin and loan yield. The acquisition is projected to be approximately 10% accretive to Civista’s diluted earnings per share once cost savings are realized. Despite these positive developments, Civista’s shares have not performed as well as its peers, potentially due to its relatively low tangible common equity ratio and higher levels of non-performing assets.
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