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Investing.com - Citi raised its price target on Home Bancshares (NYSE:HOMB) to $30.00 from $28.00 on Friday, while maintaining a Neutral rating on the stock. According to InvestingPro data, the $5.75 billion market cap bank currently trades at a P/E ratio of 13, suggesting attractive valuation metrics relative to its growth potential.
The price target increase follows Home Bancshares’ second-quarter results, which showed solid loan growth and better-than-expected pre-provision net revenue (PPNR), driven largely by fee income outperformance. The company has demonstrated consistent growth with revenue increasing 3.77% over the last twelve months, while maintaining a healthy 2.75% dividend yield.
Citi noted that the company’s strong core profitability metrics and ample capital base provide significant resources for future deployment and operational flexibility.
The firm adjusted its price target based on lower cost of equity assumptions due to improving national lending trends, as well as modest upside adjustments to earnings per share outlook.
While some previously mentioned credit clean-up is taking modestly longer than expected, Citi observed that good progress has been made, with further recoveries likely in coming quarters that could support allowance for credit losses (ACL) build without increased loan loss provision expenses.
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