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Tuesday, financial research firm Jefferies began coverage of Texas Capital Bancshares (NASDAQ:TCBI) stock, assigning it a Hold rating and setting a price target of $80. The firm’s analysis indicates that the current valuation of TCBI, which stands at 11.8 times the projected earnings for 2026 compared to its peers’ average of 9.5 times, accurately reflects the company’s prospects. Currently trading at $75.35 with a market cap of $3.46 billion, TCBI shows a high P/E ratio of 43x. According to InvestingPro analysis, the stock appears to be trading above its Fair Value.
The decision to initiate coverage with a Hold rating stems from various factors, according to Jefferies. While acknowledging the positive aspects of Texas Capital Bancshares’ ongoing strategic transformation efforts and its robust capital and credit profile, Jefferies also notes the company’s success in effectively reducing deposit costs recently. InvestingPro data reveals the company maintains a moderate debt-to-equity ratio of 0.45 and has achieved a strong 23.53% return over the past year.
Despite these strengths, Jefferies points out that Texas Capital Bancshares’ return metrics fall short when compared to those of its peers. This comparison underpins the rationale behind the Hold rating, suggesting that the firm sees limited upside potential for the stock at its current market valuation. InvestingPro analysis shows mixed signals, with 11 analysts revising earnings downward for the upcoming period, though net income growth is expected this year. Unlock comprehensive analysis and 8 additional ProTips with an InvestingPro subscription.
The price target of $80 set by Jefferies reflects their assessment of the stock’s fair value based on the analysis of the company’s financial outlook. This target is influenced by both the positive initiatives Texas Capital Bancshares has undertaken and the challenges it faces in improving its return metrics.
Investors and market watchers now have Jefferies’ perspective on Texas Capital Bancshares as a reference point for the stock’s potential performance. The Hold rating and $80 price target will be key indicators for those tracking the progress of the company’s strategic initiatives and financial metrics in the context of its industry.
In other recent news, Texas Capital Bancshares reported its first-quarter 2025 earnings, which fell slightly short of expectations. The company posted earnings per share of $0.92, missing the forecast of $0.9518, and revenue of $280.48 million, below the anticipated $285.71 million. Despite these shortfalls, the company demonstrated strong year-over-year growth, with total revenue increasing by 9% and net income rising by 44% to $42.7 million. Texas Capital has raised its revenue guidance for 2025, aiming for high single to low double-digit growth, reflecting management’s confidence in future prospects.
Additionally, DA Davidson lowered its price target for Texas Capital Bancshares to $76 while maintaining a Neutral rating, citing mixed quarterly results with strong net interest income but declining capital markets fees. Stephens also adjusted its price target to $90, maintaining an Overweight rating, noting robust net interest income despite weaker fee income. The firm highlighted Texas Capital’s solid capital position and appealing valuation as reasons for its positive outlook.
In corporate governance news, Texas Capital Bancshares appointed Ranjana B. Clark to its Board of Directors, bringing extensive experience in financial services and technology sectors. These developments indicate Texas Capital’s strategic focus on growth and adaptation amidst market uncertainties.
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