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Friday - Stephens analysts have increased their price target on Finward Bancorp (NASDAQ:FNWD) shares to $34.00 from $32.00, while maintaining an Overweight rating on the stock. The revision follows Finward’s first-quarter earnings, which surpassed analyst expectations. With a current market capitalization of $132.85 million and trading at $30.72, the stock is currently trading near its InvestingPro Fair Value.
Finward Bancorp reported operating earnings per share (Op. EPS) of $0.09 for the first quarter of 2025, which was notably higher than the $0.04 estimate by Stephens. The company’s operating pre-provision net revenue (Op. PPNR) also outperformed forecasts by approximately 13%. This financial boost was primarily due to better-than-anticipated net interest income and net interest margin (NIM), which helped mitigate weaker fee revenues and a higher tax rate. InvestingPro data reveals the company has maintained dividend payments for 28 consecutive years, currently offering a 1.56% yield. Subscribers can access 6 additional ProTips and comprehensive financial metrics.
The tangible book value (TBV) of Finward Bancorp stood at $29.55, and Stephens’ models project a TBV of $34.44 by the end of 2026. Additionally, the company’s tangible common equity (TCE) ratio increased to 6.3%. However, the analysts noted that the securities portfolio, yielding 2.38%, continues to negatively impact the bank’s overall profitability.
Melissa Roberts, Stephens’ Strategic Opportunities & Index Rebalancing analyst, anticipates that Finward Bancorp will be added to the Russell 2000 Index during the upcoming reconstitution on June 27, 2025. This potential inclusion is expected to generate passive demand for approximately 384,000 shares, which equates to around 60 days of buying based on the past three months’ average daily trading volume.
Historical data suggests that new bank additions to the Russell 2000 Index may experience increased trading activity following the reconstitution. According to Stephens’ analysis, bank stocks have consistently returned to outperformance after the index’s reconstitution, showing strength in the three months following the event and continuing through the end of the year in the last four reconstitution periods.
In light of these factors, Stephens reaffirmed their Overweight rating on Finward Bancorp, signaling confidence in the stock’s future performance.
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