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Investing.com - Keefe, Bruyette & Woods (KBW) lowered its price target on First Internet Bancorp (NASDAQ:INBK) to $25.00 from $27.00 on Friday, while maintaining its Market Perform rating on the stock.
The price target reduction follows First Internet Bancorp’s third-quarter results, which KBW described as "broadly below expectations" due to ongoing credit issues within the company’s small business and franchise finance portfolios. InvestingPro data reveals concerning financial health metrics, with the company’s overall financial health score rated as WEAK.
KBW noted that elevated net charge-offs pressured earnings, while weaker net interest income dragged down pre-provision net revenue for the banking company.
According to KBW, First Internet Bancorp’s management characterized the elevated net charge-offs as "an aggressive method to clean up the credit book," though the research firm indicated uncertainty remains regarding the magnitude and length of these credit cycles.
KBW expressed concern about risks to management’s guidance, citing its dependence on above-peer balance sheet growth, significant net interest margin expansion, and credit normalization—factors that could be difficult to achieve if macroeconomic conditions deteriorate.
In other recent news, First Internet Bancorp reported a substantial earnings miss for the third quarter of 2025. The company announced an earnings per share (EPS) of -$1.43, falling short of the anticipated $0.63, resulting in a surprise of -326.98%. Additionally, First Internet Bancorp’s revenue came in at $43.5 million, which was below the forecasted $45.48 million. These recent developments have attracted attention from investors and analysts alike. The company’s financial performance has been a focal point due to the significant deviation from expectations. While the earnings report highlighted these figures, it also underscored the challenges faced during the quarter. Analysts are closely monitoring the situation to assess potential future impacts on the company.
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