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On Thursday, DA Davidson confirmed its positive outlook on WesBanco stock (NASDAQ:WSBC), maintaining a Buy rating and a $45.00 price target. Currently trading at $32.33, InvestingPro analysis suggests the stock is undervalued. The firm’s analyst, Manuel Navas, highlighted WesBanco’s potential for continued outperformance in loan and deposit growth compared to its peers, following the completion of its PFC deal. The company has maintained dividend payments for 49 consecutive years, with a current yield of 4.62%. Navas noted the adjustment of the company’s 2025 estimates due to the finalization of the deal on February 28, 2025. Despite the year-to-date market pullback, he sees this as an opportunity to invest in a company with robust earnings growth prospects.
WesBanco’s earnings are expected to surge by 44% year-over-year in 2025 and by 18% in 2026. The analyst underscored WesBanco’s projected post-merger return profile, with a 2026 return on assets (ROA) of 1.36%, which stands above its peers. This performance is not currently reflected in the company’s valuation, trading at 1.4 times tangible book value (TBV) compared to the Keefe Bruyette & Woods Regional Banking Index (KRX) peers average of 1.5 times, and at 8.1 times its 2026 earnings, which is lower than the peer average of 9.7 times.
Navas’s reiteration of the Buy rating comes with a view that WesBanco’s stock presents a 40% upside potential. The company’s strong earnings growth trajectory and favorable return metrics provide a compelling case for investors considering WesBanco amid the current market dynamics. WesBanco’s recent completion of its PFC deal is expected to significantly boost its profitability and enhance its competitive stance in the banking sector.
Investors in WesBanco shares are being pointed towards the company’s solid fundamentals and the potential for significant value appreciation. According to Navas, the current market conditions offer an attractive entry point into a financial institution that is poised for substantial earnings growth and above-average returns. WesBanco’s strategic moves and financial outlook appear to resonate well with DA Davidson’s analysis, reinforcing the investment firm’s confidence in the bank’s future performance. InvestingPro subscribers can access additional insights, including 6 more ProTips and a comprehensive Pro Research Report, which provides deep-dive analysis of WesBanco’s financial health, valuation metrics, and growth prospects.
In other recent news, WesBanco Inc. reported impressive third-quarter 2024 earnings, surpassing analyst expectations. The company posted an earnings per share (EPS) of $0.71, beating the anticipated $0.54, and generated revenue of $162.89 million, exceeding the forecasted $156.44 million. The bank’s robust performance was highlighted by significant growth in loans and deposits, supported by strategic initiatives like branch consolidations. In a related development, the Federal Deposit Insurance Corporation (FDIC) approved WesBanco’s merger with Premier Bank, which will expand its operations across seven states. This merger is pending final regulatory approvals but marks a significant step in WesBanco’s growth strategy.
Additionally, DA Davidson raised its price target for WesBanco to $45 from $44, maintaining a Buy rating. The analysts at DA Davidson noted the bank’s strong pre-provision net revenue and net interest margin expansion as key factors in their optimistic outlook. They also highlighted the potential for further earnings growth through a possible post-deal securities restructuring. These developments reflect a positive trajectory for WesBanco as it continues to strengthen its market position and financial performance.
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