Jefferies initiates Pinnacle Financial with Buy, sets $135 target

Tuesday, on the heels of a new analyst coverage, shares of Pinnacle Financial Partners (NASDAQ:PNFP), an $8.4 billion market cap bank with a proven track record of 13 consecutive years of dividend payments, are in focus. Jefferies has initiated coverage on the bank with a Buy rating and a price target of $135.00. According to InvestingPro analysis, the stock appears slightly undervalued based on its Fair Value model.

The firm’s analyst cited the bank’s solid management and its potential for long-term growth, particularly due to its strong position in the fast-growing Southeastern markets. The endorsement from Jefferies suggests confidence in Pinnacle Financial’s ability to maintain above-average growth rates, ranging from high single to low double digits across various financial metrics. This outlook is supported by the bank’s current revenue growth of 3.47% and its "GOOD" overall financial health score from InvestingPro.

Pinnacle Financial’s growth prospects are expected to support a sustained premium valuation compared to its peers, according to Jefferies. This outlook is based on the bank’s performance even in diverse macroeconomic scenarios.

The new price target of $135.00 represents a vote of confidence in Pinnacle Financial’s strategic direction and market positioning. Jefferies’ analysis points to a robust growth trajectory for the bank, which is likely to be well-received by investors.

Pinnacle Financial Partners’ entry into the market with a Buy rating from a prominent firm like Jefferies could influence investor sentiment and market perceptions of the bank’s stock. The coverage initiation and price target are based on current assessments of the bank’s performance and market opportunities.

In other recent news, Pinnacle Financial Partners has announced dividend payments for both common and preferred shareholders. The Board of Directors approved a cash dividend of $0.24 per common share and a dividend of approximately $3.8 million for preferred shareholders, payable in late May and early June 2025. Additionally, at the 2025 Annual Meeting of Shareholders, Pinnacle Financial re-elected all 12 directors and approved executive compensation, indicating shareholder satisfaction with the company’s leadership and compensation strategies.

Moody’s Ratings has affirmed Pinnacle Financial’s ratings and upgraded the outlook to stable, citing improved capitalization and reduced exposure to commercial real estate construction lending. Despite these positive developments, Keefe, Bruyette & Woods (KBW) adjusted the price target for Pinnacle Financial to $115 from $130, maintaining a Market Perform rating. This adjustment reflects a more conservative stance due to macroeconomic headwinds and revised earnings estimates.

Pinnacle Financial continues to demonstrate strong asset quality and stable credit metrics, with improvements noted in its performance from Bankers Healthcare Group. The firm’s capitalization and liquidity levels have shown improvement, although challenges remain with higher deposit costs. These developments highlight Pinnacle Financial’s ongoing efforts to enhance its financial position and navigate current economic conditions.

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