Bank of America just raised its EUR/USD forecast
On Thursday, Keefe, Bruyette & Woods (KBW) maintained their Market Perform rating on Valley National Bancorp (NASDAQ:VLY) with a steady price target of $11.00. KBW noted that Valley National’s balance sheet is showing positive trends, with increased capital and reserves, a shift from commercial real estate (CRE) loans to commercial and industrial (C&I) loans, and suggested that these changes could lead to a higher valuation over time. Currently, the bank’s stock trades at 1.0 times tangible book value (TBV).
The firm highlighted that Valley National has been successfully addressing concerns by strengthening its capital, with a Common Equity Tier 1 (CET1) ratio of 10.8% compared to 9.3% from the previous year. Additionally, the bank has reduced its CRE concentration, which now stands at 353% of its total Risk-Based Capital (RBC), down from 464% year-over-year. These strategies, according to KBW, could enhance the stock’s multiple in the future. For deeper insights into Valley National’s financial health and valuation metrics, InvestingPro offers comprehensive analysis through its Pro Research Report, available for over 1,400 US stocks.
Valley National’s return on tangible common equity (ROTCE) is also expected to improve, with projections of 6.5% for 2024, 9.1% for 2025, and 10.3% for 2026. The transition towards a price-to-earnings (P/E) based valuation could provide further upside, but this shift may take some time.
The analysis acknowledged that the level of long-term interest rates could affect market sentiment, particularly concerning credit. However, for Valley National, a steeper yield curve is seen as beneficial, with short-end rates having a less significant impact on the bank’s performance.
In other recent news, Valley National Bancorp reported its Q1 2025 earnings, which showed a slight miss on both earnings per share (EPS) and revenue forecasts. The company posted an EPS of $0.18, falling short of the $0.19 expected, and revenue of $478.4 million, below the anticipated $482.3 million. Despite this, the bank demonstrated resilience with a stable revenue base and an increasing net interest margin for the fourth consecutive quarter. Furthermore, Valley National Bancorp experienced growth in core customer deposits by $600 million, while brokered deposits decreased by $700 million.
In additional developments, Jefferies initiated coverage on Valley National Bancorp with a Hold rating and set a price target of $10.00. The firm acknowledged the bank’s improvements in strengthening its balance sheet and enhancing its net interest margin but expressed caution due to the ongoing transitional phase. Jefferies noted that Valley National’s efforts to reach profitability levels comparable to its peers might face delays, particularly if economic conditions slow down.
Moreover, Valley National Bancorp announced the outcomes of its recent shareholder meeting, where 11 directors were elected to the board, and KPMG LLP was ratified as the independent registered public accounting firm for the fiscal year ending December 31, 2025. The company’s CEO, Ira Robbins, is set to assume the role of President following the announced retirement of current President Thomas A. Iadanza, effective June 30, 2025. These updates reflect the company’s ongoing strategic changes and governance developments.
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