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Investing.com - Keefe, Bruyette & Woods raised its price target on First Merchants (NASDAQ:FRME) to $50.00 from $49.00 on Friday, maintaining an Outperform rating on the stock.
The price target increase follows First Merchants’ agreement to acquire First Savings Financial Group (FSFG), a $2.4 billion-asset bank operating in southern Indiana, in an all-stock deal valued at approximately $241 million. First Merchants, with a market capitalization of $2.26 billion, has demonstrated strong shareholder returns through its 37-year track record of maintaining dividend payments, currently yielding 3.7%.
KBW noted the transaction is expected to be approximately 11% accretive to earnings once fully integrated, with an initial impact to tangible book value of 4.8% and a three-year earn back period.
The acquisition expands First Merchants’ footprint into southern Indiana and provides entry into the greater Louisville, Kentucky marketplace, aligning with the company’s historical merger and acquisition strategy.
Based on the acquisition announcement, KBW raised its 2026 earnings estimate for First Merchants by approximately 9% and introduced its 2027 estimate while increasing the price target. For deeper insights into First Merchants’ financial health and valuation metrics, including exclusive ProTips and comprehensive analysis, visit InvestingPro, where you’ll find detailed research reports and expert analysis.
In other recent news, First Merchants Corporation has announced a definitive merger agreement to acquire First Savings Financial Group in an all-stock transaction valued at approximately $241.3 million. First Savings shareholders will receive 0.85 shares of First Merchants common stock for each First Savings share. In light of this acquisition, Raymond James downgraded First Merchants from Outperform to Market Perform, citing concerns over reduced likelihood of share repurchases and securities restructurings in the near term. Additionally, First Merchants declared a quarterly cash dividend of $0.36 per common share, maintaining the same payout level as its previous distribution.
Meanwhile, Fermi America has filed for a listing on the Nasdaq stock exchange under the ticker symbol ’FRMI.’ The company has appointed UBS Investment Bank, Cantor, and Mizuho as the book-running managers for the listing. These developments highlight significant corporate actions and strategic moves within these companies.
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