Investar stock price target raised to $27 from $22 at Piper Sandler

Investing.com - Piper Sandler raised its price target on Investar Holding (NASDAQ:ISTR) to $27.00 from $22.00 on Wednesday, while maintaining an Overweight rating on the stock. The company, currently trading at a P/E ratio of 9.55x with a market capitalization of $210.38 million, has shown strong momentum with an 8.18% gain over the past week. According to InvestingPro data, the stock appears fairly valued based on its proprietary Fair Value model.

The price target increase follows Investar’s announced acquisition of Wichita Falls Bancshares, which Piper Sandler describes as a "transformative acquisition" that provides strategic expansion into Texas with significant earnings accretion potential. The company has demonstrated strong financial discipline, maintaining dividend payments for 12 consecutive years with a current yield of 2.15%. InvestingPro subscribers can access 8 additional key insights about Investar’s financial health and growth prospects.

The acquisition is expected to result in tangible book value dilution of approximately 11.8%, including the associated capital raise, with an estimated earnback period of 2.9 years. Piper Sandler notes the deal is projected to be highly accretive to earnings, with estimated EPS accretion of 35%-36% post-integration.

Strategically, the merger expands Investar’s footprint in Texas, increasing its asset exposure in the state to approximately 36% of the pro forma balance sheet and marking its entry into the North Dallas market. The transaction enhances Investar’s scale and geographic diversification.

Piper Sandler’s new price target of $27 represents approximately 9 times the firm’s 2026 earnings estimate of $2.95 per share, equating to roughly 1.2 times year-end 2026 tangible book value per share. The consensus among analysts remains strongly bullish, with InvestingPro data showing an overall Financial Health score of "FAIR" and analyst targets ranging from $23 to $27.

In other recent news, Investar Holding Corporation announced a definitive agreement to acquire Wichita Falls Bancshares, Inc. in a transaction valued at approximately $83.6 million. This deal involves a combination of cash and stock, with Wichita Falls shareholders set to receive 3,955,334 shares of Investar common stock and $7.2 million in cash. The acquisition will expand Investar’s presence in Texas, adding seven branches and two mortgage offices with assets totaling approximately $1.5 billion. This strategic move will result in a combined entity with over $4 billion in assets. Additionally, Investar revealed a private placement of $32.5 million of 6.5% Series A Non-Cumulative Perpetual Convertible Preferred Stock to selected institutional and accredited investors. The transaction has received unanimous approval from the boards of both companies and is expected to finalize in the fourth quarter of 2025, pending necessary shareholder and regulatory approvals. Janney Montgomery Scott LLC and Olsen Palmer LLC served as financial advisors for Investar and Wichita Falls, respectively. Following the merger, First National Bank will adopt the Investar Bank name, while retaining its existing staff.

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