Jefferies initiates South State stock with Buy, sets $110 target

On Tuesday, Jefferies launched coverage of South State Corporation (NYSE:SSB), a prominent financial services company, with a Buy rating and a price target of $110.00. The research firm’s positive stance is grounded in several key factors that suggest a bright outlook for the company. According to InvestingPro data, analysts’ consensus is bullish, with price targets ranging from $97 to $120, suggesting potential upside from the current price of $90.62.

South State’s significant and expanding footprint in the lucrative Southern U.S. markets is a primary reason for the optimistic rating. The company is also expected to quickly rebuild capital following its recent acquisition of IBTX, which is seen as a strategic move to strengthen its market position. The company’s strong financial foundation is evidenced by its impressive dividend track record - InvestingPro data shows South State has maintained dividend payments for 29 consecutive years and raised them for 13 straight years.

The firm has a consistent history of strong credit quality, which has contributed to its solid reputation in the financial sector. Jefferies anticipates that South State will continue to demonstrate peer-leading return metrics, which supports the case for a premium valuation relative to its competitors. Current financial metrics support this view, with the company trading at a P/E ratio of 14.7 and maintaining strong profitability with a return on equity of 7%. Based on InvestingPro’s Fair Value analysis, the stock appears slightly undervalued at current levels.

The analyst at Jefferies conveyed confidence in South State’s capabilities, stating, "We are initiating coverage of SouthState with a BUY rating and a $110 price target. Our rating reflects the company’s robust and growing presence in the lucrative Southern US markets, anticipated ability to swiftly rebuild capital following the IBTX acquisition, consistent history of strong credit quality, and our expectations for peer-leading return metrics going forward."

This new coverage and price target announcement by Jefferies underscores the firm’s belief that South State’s strategic initiatives and strong market position justify a higher valuation compared to its peers. The company’s stock performance will be closely watched by investors as it continues to navigate the financial landscape and capitalize on the opportunities within the Southern U.S. markets.

In other recent news, South State Corporation has reported its first-quarter 2025 earnings, which exceeded expectations. The company posted an impressive earnings per share (EPS) of $2.15, significantly surpassing the forecasted $0.88. Additionally, South State’s revenue reached $630.64 million, beating the anticipated $611.62 million. Despite the strong financial performance, Citi analyst Benjamin Gerlinger lowered the bank’s price target from $123 to $113 while maintaining a Buy rating, citing the bank’s solid credit profile and capital base as positive factors. The first quarter also saw South State complete the integration with Independent Bank (NASDAQ:INDB), which contributed to a net interest margin of 3.85%, above the guided range. The company has also engaged in strategic moves such as a securities restructure and a branch sale-leaseback deal. Analysts from Citi highlighted that these developments are expected to enhance South State’s earnings potential, even though the bank experienced negative core loan growth trends. South State’s management reaffirmed its guidance, projecting steady net interest margins between 3.8% and 3.9% for the year.

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