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Tuesday, Atlantic Union Bankshares (NYSE:AUB) received a new Buy rating from Jefferies, along with a price target set at $37.00. The financial institution, which has a growing presence in the Mid-Atlantic region, is recognized for its strong credit quality and potential for margin expansion. With a market capitalization of $2.27 billion and a P/E ratio of 13.61x, InvestingPro analysis suggests the stock is currently trading slightly above its Fair Value.
The initiation by Jefferies comes at a time when Atlantic Union Bankshares is experiencing a price-to-earnings (P/E) discount relative to its competitors. This valuation gap is attributed to concerns about the economic health of the Washington DC area, where the bank operates significantly. While the stock has declined 25.25% over the past six months, Jefferies suggests that these concerns may not be as significant as the market perceives. According to InvestingPro, analysts are forecasting both sales and net income growth for the current year, with 10+ additional insights available to subscribers.
Jefferies’ positive outlook is based on several key factors. Atlantic Union’s robust presence and expansion in the Mid-Atlantic market is a primary driver of the firm’s Buy rating. In addition to market presence, the bank’s history of strong credit quality contributes to the confidence in its performance. The bank has maintained an impressive track record of raising dividends for 14 consecutive years, currently offering a 4.45% yield.
Furthermore, Atlantic Union Bankshares is identified as having opportunities to expand its margins. This potential for improved profitability is another reason for the optimistic stance from Jefferies.
The price target of $37.00 implies an expectation of upside potential for the bank’s shares. The new coverage and price target by Jefferies provide investors with a fresh perspective on the bank’s stock, particularly considering the current economic concerns in its core market areas.
In other recent news, Atlantic Union Bankshares Corporation reported its first-quarter 2025 earnings, revealing a miss on both earnings per share (EPS) and revenue expectations. The company posted an EPS of $0.57, falling short of the forecasted $0.72, and revenue reached $217.19 million, below the anticipated $221.4 million. Despite these results, Atlantic Union completed the acquisition of Sandy Spring Bancorp (NASDAQ:SASR), expanding its presence across Maryland, Virginia, and North Carolina. Analysts at Raymond (NSE:RYMD) James maintained their Outperform rating for Atlantic Union, with a price target of $37.00, citing confidence in the bank’s conservative underwriting practices and market diversification. The firm noted that the bank’s stock has faced challenges due to its association with Dogecoin and the recent acquisition, which increases exposure to volatile assets. Atlantic Union also announced the appointment of Bradley S. Haun as the new chief risk officer, succeeding Sherry Williams, who will retire in July 2025. CEO John Asbury (NYSE:ABG) emphasized the strategic importance of the Sandy Spring acquisition and highlighted the bank’s focus on national security and defense-related contractors. These developments underscore the bank’s ongoing efforts to navigate economic uncertainties and expand its footprint in the Mid-Atlantic region.
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