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On Thursday, Keefe, Bruyette & Woods adjusted their outlook on Nicolet Bankshares (NASDAQ:NCBS) (NYSE: NIC (NASDAQ:EGOV)), increasing the price target to $115 from the previous $110, while retaining a Market Perform rating on the stock. The revision comes after Nicolet Bankshares reported operating earnings of $2.17 per share, surpassing expectations due to robust revenue growth from both spread and fee income. This led to a $0.13 per share beat in pre-provision net revenue (PPNR).
The bank's loan growth matched forecasts at 4%, while deposit growth exceeded last quarter's annualized rate, reaching 8%. These results were complemented by favorable credit trends, which allowed for a reduced provision for credit losses. Additionally, unexpected share repurchases contributed positively to Nicolet's financial performance. The company's strong execution is reflected in its impressive 27.15% revenue growth over the last twelve months.
The improved financial metrics have prompted Keefe, Bruyette & Woods to revise their earnings estimates for Nicolet Bankshares for the years 2025 and 2026 upwards by 4.5% and 3%, respectively. The analysts' decision to raise the price target to $115 reflects their anticipation of continued margin benefits, consistent organic loan growth, expected expense management, and stable credit trends.
The Market Perform rating suggests that while the analysts recognize Nicolet Bankshares' solid performance and potential, they also believe the stock is valued appropriately in relation to its current financials and market position. The new price target implies a modest upside from the current trading levels, indicating a neutral stance on the stock's growth prospects.
In other recent news, Nicolet Bankshares has been the focus of attention following strong fourth-quarter 2024 earnings that surpassed both consensus and firm expectations. The company reported earnings per share (EPS) of $2.19, exceeding the consensus estimate of $1.97. This performance was attributed to an increase in the net interest margin (NIM) by 10 basis points and exceptional credit quality.
Given these robust figures, Maxim Group revised its 2025 GAAP EPS estimate for Nicolet upward to $9.00 from $8.60, and increased the price target for Nicolet Bankshares to $131.00. Meanwhile, Piper Sandler raised its price target for Nicolet to $120, maintaining a Neutral rating.
These adjustments reflect recent developments and the anticipation of a wider NIM moving forward. Nicolet Bankshares also reported mid-to-high single-digit annualized growth in both loans and core deposits, demonstrating solid operating leverage and top-tier credit metrics.
Piper Sandler's analyst, Nathan Rice, highlighted the bank's potential for future mergers and acquisitions, and the possibility to increase capital returns to shareholders. Maxim Group's analyst expressed confidence in Nicolet's operational strength and strategic acquisitions, which have consistently added value to the company's bottom line.
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