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Investing.com - DA Davidson maintained its Buy rating on Flagstar Bank (NYSE:FLG) with a price target of $14.50, citing the bank’s progress on credit improvement and expected return to profitability. Currently trading at $12.11, the stock has gained over 21% year-to-date, though InvestingPro data indicates analysts have revised their earnings expectations downward for the upcoming period.
The firm noted that the third quarter likely represents an inflection point for Flagstar Bank, which is on track to become profitable in the fourth quarter of 2024. Commercial and industrial net loan growth turned positive, with strong pipelines reported. This turnaround is crucial for the $5.03 billion market cap institution, which has seen revenue decline by 15.9% over the last twelve months.
DA Davidson highlighted that Flagstar’s balance sheet is expected to reach its lowest point in the fourth quarter before beginning to grow in 2026. The bank’s net interest margin has increased for three consecutive quarters, with potential for strong margin expansion next year.
Credit trends continue to improve at the institution, with a positive outlook for non-performing loans. The research firm described Flagstar’s recovery as "a remarkable transformation since the brink of failing in March 2024."
The firm maintained its Buy rating and $14.50 price target, noting that Flagstar Bank stock currently trades below tangible book value.
In other recent news, Flagstar Financial Inc. reported its third-quarter 2025 earnings, exceeding Wall Street expectations. The company posted an adjusted net loss of $0.07 per share, which was better than the forecasted loss of $0.08 per share. Additionally, Flagstar Financial’s revenue came in at $519 million, surpassing the anticipated $514.96 million. These results were a positive surprise for investors. The earnings announcement was followed by a pre-market stock price increase, reflecting investor sentiment. Although the stock price movement itself is not the focus, the earnings and revenue results are crucial for stakeholders. The company’s ability to outperform expectations in both earnings and revenue is seen as a significant development. These recent updates provide insight into Flagstar Financial’s current financial performance.
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