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On Wednesday, Keefe, Bruyette & Woods revised their price target on Cadence Bancorp (NYSE:CADE) shares, lowering it to $38.00 from the previous $42.00, while maintaining an Outperform rating. The adjustment follows the firm’s reassessment of the net interest margin (NIM) expectations for the bank, yet the analysts see the revenue growth potential of Cadence Bancorp as unchanged and robust.
The firm’s analyst pointed out that despite a flatter NIM outlook, Cadence Bancorp’s pre-provision net revenue (PPNR) exceeded expectations and the bank’s guidance remained steady. Supporting this view, InvestingPro data shows impressive revenue growth of 49% over the last twelve months, reaching $1.72 billion. The analyst believes that Cadence Bancorp’s growth prospects are still promising in the current economic climate, and the perceived challenges are being balanced by an expanding balance sheet.
The report highlighted that Cadence Bancorp’s shares have underperformed year-to-date relative to the KBW Regional Banking Index (KRX), with a 19% decline compared to the index’s 12.5% drop. However, Keefe, Bruyette & Woods suggests that the bank’s organic growth trajectory and revenue outlook could differentiate it from its peers throughout the year.
The analyst also noted the added potential value from strategic capital deployment opportunities, such as mergers and acquisitions or share buybacks. With the current valuation of Cadence Bancorp’s shares considered inexpensive, trading at 9 times the estimated 2026 earnings and 1.25 times the tangible book value, the firm reaffirmed their Outperform rating, indicating a positive stance on the stock.
In other recent news, Cadence Bancorp reported its first-quarter earnings for 2025, which exceeded analysts’ expectations. The company posted an earnings per share (EPS) of $0.71, surpassing the forecast of $0.64. However, its revenue slightly missed projections, coming in at $448.6 million compared to the anticipated $451.3 million. Additionally, Cadence Bancorp completed the acquisition of First Chatham Bank, expanding its presence in Georgia. Analyst firms have noted the company’s strong performance, with a net income of $130.9 million and an improved net interest margin of 3.46%. The bank also reported solid loan growth, particularly in Texas, Florida, and Georgia, contributing to a 3.7% annualized increase. Despite competitive challenges, Cadence Bancorp remains optimistic about its future, with plans for low to mid-single-digit loan growth and stable net interest margins. The company is also open to further mergers and acquisitions that align with its strategic goals.
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