Canopy Growth stock tumbles after announcing $200 million share sale plan
Investing.com - Keefe, Bruyette & Woods raised its price target on Chemung Financial (NASDAQ:CHMG) stock to $59.00 from $55.00 on Monday, while maintaining a Market Perform rating.
The financial services firm cited Chemung’s improved profitability outlook following strategic balance sheet restructuring. During the quarter, Chemung issued $45 million of subordinated debt and sold $245.5 million of available-for-sale securities at a $17.5 million loss to better position its balance sheet. The $251 million market cap company maintains a conservative debt-to-equity ratio of 0.46, as revealed by InvestingPro analysis.
Proceeds from these transactions have been used to pay down expensive funding and will support future loan growth. The firm noted that Chemung’s pre-provision net revenue missed expectations by $0.01, as strong net interest income was offset by higher expenses and slightly lower fees.
Chemung Financial shares declined 1.65% on Friday, underperforming the KRX index by 207 basis points. Year-to-date, the stock has gained 7.3%, outperforming the KRX by 4.8%. The stock currently trades at a P/E ratio of 22.75x and has maintained dividend payments for an impressive 52 consecutive years. InvestingPro analysis suggests the stock is currently trading above its Fair Value, with 6 additional exclusive insights available to subscribers.
While Keefe, Bruyette & Woods views the balance sheet restructuring positively for more profitable growth and improved capital levels, it maintained its Market Perform rating based on near-term profitability outlook, despite acknowledging positive underlying trends in credit quality, loan pipeline, and asset repricing opportunities supporting net interest margin.
In other recent news, Chemung Financial has reported earnings that exceeded expectations, primarily due to lower-than-anticipated operating expenses. The company’s core earnings per share (EPS) outperformed projections, as highlighted by Piper Sandler analysts. They noted a mid-single-digit growth in loans, driven by commercial real estate activity, and a seasonal rise in deposit balances. Additionally, the net interest margin saw a slight increase to 2.96%, aligning with market predictions. Despite stable net interest income, the firm maintained robust capital levels and reported a decrease in net charge-offs, although nonperforming assets saw a slight increase. Piper Sandler responded to these earnings by raising Chemung Financial’s price target from $50 to $54, while maintaining a Neutral rating. The analyst firm emphasized the role of controlled expenses in the company’s positive performance and expressed a cautiously optimistic outlook. These developments are crucial for investors considering Chemung Financial’s future prospects.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.