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On Tuesday, Keefe, Bruyette & Woods adjusted their price target on Renasant Corp (NYSE: NYSE:RNST) shares, lowering it to $43 from $45, while maintaining an Outperform rating. The revision follows Renasant’s first-quarter earnings, which surpassed expectations, and the firm’s positive outlook on the company’s future performance, particularly in anticipation of the upcoming merger with First Bancshares in the next quarter.
The financial institution’s recent performance highlighted stronger-than-anticipated growth, net interest margin (NIM), fee income, and credit trends. Despite the reduction in the price target, Keefe, Bruyette & Woods expressed continued optimism about Renasant’s prospects. The firm’s analysts believe that the stock, currently trading at only 1.4 times pro forma tangible book value (TBV) and 9 times earnings per share (EPS), is well-positioned given the forthcoming catalyst of the First Bancshares merger and Renasant’s robust balance sheet, which boasts a tangible common equity (TCE) ratio of 9.9% and an allowance for credit losses (ACL) of 1.70%.
Keefe, Bruyette & Woods also raised their earnings per share estimate for 2025 to $3.00, up from $2.95, attributing this adjustment to the company’s earnings beat by $0.05. The 2026 earnings per share estimate remains unchanged at $3.50, reflecting an anticipated return on assets (ROA) of 1.25%, return on tangible common equity (ROTCE) of 13.4%, and an efficiency ratio of 57%. The revised price target of $43 is based on 1.8 times pro forma TBV and 12.3 times the 2026 estimated EPS, which accounts for lower industry multiples.
The analysts concluded their commentary by reiterating their Outperform rating for Renasant Corp, underscoring the attraction to the company’s strong balance sheet combined with the highly accretive First Bancshares deal, which is expected to enhance profitability and growth in 2026. According to InvestingPro’s comprehensive analysis, the company maintains a "GOOD" overall Financial Health score, and their Fair Value model suggests the stock is currently undervalued. For deeper insights into Renasant’s financial health and growth prospects, investors can access the detailed Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, Renasant Corporation reported several key developments that are of interest to investors. The company announced the appointment of Kevin D. Chapman as the new Chief Executive Officer, succeeding C. Mitchell Waycaster, who will now serve as Executive Vice Chairman. This leadership change is part of a planned succession strategy aimed at aligning with Renasant’s growth objectives. Additionally, Renasant’s shareholders approved significant proposals at the Annual Meeting, including amendments to the Articles of Incorporation and the ratification of HORNE LLP as the independent registered public accountants for 2025.
Renasant Corporation also declared a quarterly cash dividend of $0.22 per share, reflecting its commitment to providing value to shareholders. In another positive development, Raymond (NSE:RYMD) James upgraded Renasant’s stock rating to Strong Buy, citing better-than-expected first-quarter results and the early completion of its acquisition of The First Bancshares (NYSE:FBMS). The analyst from Raymond James highlighted Renasant’s enhanced capital flexibility and robust credit position as factors contributing to the favorable outlook.
The company’s recent acquisition is expected to bolster its financial standing, despite some anticipated operational adjustments in the coming quarters. These updates indicate a strategic focus on strengthening Renasant’s market position and delivering value to investors.
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