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On Wednesday, Keefe, Bruyette & Woods made an adjustment to the price target of Washington Federal (NASDAQ: NASDAQ:WAFD), reducing it from $32.00 to $30.00. Despite the change, the firm has kept a Market Perform rating on the bank’s shares. The modification follows a notable performance by Washington Federal, which saw its shares rally after reporting second-quarter financial results that surpassed expectations.
Washington Federal’s stock experienced a significant boost, attributed to a positive earnings surprise. The company reported a $0.06 per share pre-provision net revenue (PPNR) beat compared to both Keefe, Bruyette & Woods and consensus estimates. This strong performance led to a 715 basis points of relative outperformance on Monday. The bank’s active share buyback program, which has 13% of shares remaining on the current authorization, is also seen as a supportive factor for the stock price.
The analyst at Keefe, Bruyette & Woods, Kelly Motta, noted that while loan growth poses a challenge due to the current macroeconomic environment, the buyback program provides a degree of stability for the stock’s value. In light of the recent financial results, the firm has made slight adjustments to their fiscal year 2025 earnings estimates, raising them modestly. However, they have reduced the fiscal year 2026 earnings estimate to $3.10 from $3.35, acknowledging the impact of a smaller balance sheet.
The decision to lower the price target to $30 reflects a cautious approach, taking into account the challenges faced by the bank in expanding its loan portfolio. Nonetheless, the maintained Market Perform rating suggests that the firm recognizes the bank’s potential to navigate through the current economic landscape, supported by its strategic measures such as the share buyback program. Washington Federal’s recent performance has drawn closer scrutiny from the market, with the latest results bringing other analysts’ expectations more in line with those of Keefe, Bruyette & Woods.
In other recent news, WaFd Inc. has announced its earnings release date for the quarter ending March 31, 2025, which will be disclosed after market close on April 17, 2025. This upcoming report will provide insights into the company’s financial performance for the first quarter of the fiscal year. Additionally, WaFd Inc. has approved a new 2025 Stock Incentive Plan, allowing for the issuance of 3,250,000 shares of common stock, which is aimed at aligning employee and shareholder interests. In terms of dividends, WaFd Inc. has declared a cash dividend of $12.1875 per share on its Series A Preferred Stock, payable on April 15, 2025. The company also announced an increase in its regular quarterly cash dividend to 27 cents per share, scheduled for payment on March 7, 2025. On the analyst front, DA Davidson has adjusted its price target for Washington Federal shares to $29.00, down from $31.00, while maintaining a Neutral rating. The firm’s updated model includes a positive outlook on Net Interest Margin and fee income, despite a lowered assumption for loan growth. These developments highlight WaFd Inc.’s ongoing financial strategies and market evaluations.
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