Jefferies sets First Citizens stock with hold, $2,050 target

Tuesday, Jefferies began covering First Citizens BancShares (NASDAQ: FCNCA), a $25.57 billion market cap bank, with a Hold rating and set a price target of $2,050. The firm’s analysis highlighted several key aspects of the bank’s performance and strategy. According to InvestingPro analysis, the stock appears undervalued at its current price of $1,918.20. The initiation of coverage by Jefferies brings fresh insights into First Citizens’ position in the banking sector.

The research firm acknowledged First Citizens’ effective capital return strategy and its solid growth trends in both loans and deposits. These factors are fundamental indicators of the bank’s operational strength and financial health. InvestingPro data reveals the bank has maintained dividend payments for 40 consecutive years and achieved a 18.9% dividend growth in the last twelve months, demonstrating consistent shareholder returns. Additionally, Jefferies pointed out the potential benefits that First Citizens could experience from the Silicon Valley Bank (SVB) business segment, especially if there is a resurgence in the "innovation economy."

Despite the positive aspects of First Citizens’ business, Jefferies expressed concerns regarding the bank’s asset sensitivity. According to the firm, First Citizens has an above-average level of asset sensitivity compared to other regional banks in their coverage. This characteristic could pose a risk to the bank, particularly in an environment where the Federal Reserve is cutting interest rates.

Jefferies’ analyst noted, "We like the company’s capital return strategy, solid loan/deposit growth trends, and the potential tailwinds that could come from the SVB segment in potential rebound of the ’innovation economy,’ but we fear FCNCA’s above-average level of asset sensitivity, which is the highest within our regional bank coverage, could overshadow these positive trends with Fed rate cuts."

The price target set by Jefferies reflects their valuation of First Citizens’ stock based on the current financial data and market conditions. The Hold rating suggests that the firm does not currently see the stock as undervalued or overvalued, but rather appropriately priced given the mix of opportunities and risks.

Investors and market watchers will likely monitor how First Citizens BancShares navigates the challenges and opportunities outlined by Jefferies. The bank’s future performance, particularly in relation to interest rate changes and the innovation economy’s dynamics, will be key factors influencing the stock’s movement. With analyst targets ranging from $1,900 to $2,460, and nine analysts recently revising earnings estimates downward, investors seeking deeper insights can access comprehensive analysis and additional ProTips through InvestingPro’s detailed research reports.

In other recent news, First Citizens BancShares Inc (NASDAQ:FCNCA). reported its financial results for the first quarter of 2025. The company posted adjusted earnings per share (EPS) of $37.79, which fell short of the forecasted $38.3. However, the company exceeded revenue expectations, achieving $2.3 billion against the anticipated $2.19 billion. This strong revenue performance was largely driven by the tech, media, telecom, and healthcare sectors. Despite the revenue beat, the EPS miss suggests challenges in maintaining profit margins, which has raised some investor concerns.

Additionally, First Citizens BancShares has been active in strategic financial maneuvers, including the termination of its FDIC loss share agreement and significant share repurchases totaling $613 million. The company also issued $500 million in senior unsecured borrowings and $750 million in subordinated debt to bolster its capital position. Looking forward, the company has set guidance for loan growth and deposit targets for the upcoming quarters, with anticipated net interest income between $6.55 billion and $6.95 billion for the year.

Analyst firms such as JPMorgan have been closely monitoring the company’s performance, particularly its asset-sensitive position and share repurchase strategy. The company remains focused on growth opportunities in the environmental and energy sectors, while also maintaining a strong capital and liquidity position to navigate potential market volatility and economic pressures.

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