On Monday, Piper Sandler upgraded Kearny Financial (NASDAQ:KRNY) stock rating from Neutral to Overweight, although the firm lowered the price target to $8.50 from $9.00.
Piper Sandler's assessment suggests that the risk/reward profile for KRNY has become favorable once more, prompting the upgrade. The stock, currently trading at $6.88, offers a notable dividend yield of 6.4% and has maintained consistent dividend payments for 10 consecutive years.
Kearny Financial's stock has experienced a significant decline, dropping approximately 24% since the end of 2023. This is in stark contrast to the broader Nasdaq Bank Index, which has seen an approximate 16% increase over the same period.
Consequently, KRNY's shares are currently trading at roughly 70% of tangible book value, compared to their peers which trade on average at 97% of tangible book value.
InvestingPro analysis indicates the stock is currently undervalued, with technical indicators suggesting oversold conditions. For deeper insights into valuation metrics and additional ProTips, subscribers can access the full analysis on InvestingPro.
The adjustment in the price target by Piper Sandler reflects changes in the multiples of peer banks. Piper Sandler's analysis indicates that the new 12-month price target of $8.50 is based on the expectation that Kearny Financial's shares will trade at 85% of the estimated tangible book value per share (TBVPS) in one year's time. This adjustment is a slight decrease from the previous target of 90%.
According to the analyst, the new price target for Kearny Financial suggests an upside potential of about 24%. This optimistic outlook is based on the current valuation of the company's shares in comparison to its peers, and the perceived attractiveness of its risk/reward balance.
Investors in Kearny Financial will be keeping a close eye on the stock following this upgrade, as the market responds to Piper Sandler's revised assessment and price target. The firm's analysis indicates the potential for a positive shift in Kearny Financial's stock performance over the next year.
In other recent news, Kearny Financial Corp. reported a significant recovery with a net income of $6.1 million for the quarter ending September 30, 2024, marking a turnaround from the previous quarter's net loss.
In addition, the company announced a quarterly cash dividend of $0.11 per share. On the balance sheet, total assets increased, with loans receivable and deposits seeing growth, while net interest income for the quarter decreased slightly.
In their annual stockholders meeting, Kearny Financial Corp. elected John N. Hopkins, Catherine A. Lawton, Craig L. Montanaro, and Leopold W. Montanaro as directors. The company also ratified Crowe LLP as its independent auditor for the fiscal year ending June 30, 2025. An advisory, non-binding resolution to approve the company's executive compensation as described in the Proxy Statement was passed.
These recent developments provide insights into Kearny Financial Corp.'s financial recovery, governance, and strategic direction. The company's latest financial performance and decisions made during the annual stockholders meeting are crucial for investors to note.
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