Interactive Brokers shares jump as it secures spot in S&P 500
On Wednesday, Keefe, Bruyette & Woods (KBW) analyst Kelly Motta updated the firm’s outlook on Popular, Inc. (NASDAQ: BPOP), increasing the price target to $129.00 from the previous $116.00, while maintaining a Market Perform rating on the stock. The adjustment follows a robust performance by the company in the last quarter of 2024, which saw a margin expansion of 15 basis points and significant growth in end-of-period (EOP) loans and deposits. The company was also more active in its stock buyback program.
According to Motta, Popular’s guidance suggests a stable pre-provision net revenue (PPNR) outlook, with an anticipated rise in net interest income (NII) balancing out lower fee revenues. However, net charge-offs (NCOs) are expected to be higher. The bank maintains a solid financial foundation, with InvestingPro data showing a "GOOD" overall financial health score and a consistent dividend growth track record, having raised dividends for six consecutive years. Despite these factors, the fourth-quarter results have bolstered confidence in the bank’s financial prospects, leading to minor revisions in KBW’s estimates, which remain above consensus.
The analyst highlighted the bank’s return on tangible common equity (ROTCE), which is expected to hold steady at 12% for the fourth quarter of 2025. Motta’s commentary underscored the bank’s strong earnings potential, projecting earnings per share (EPS) to be more than double that of its peers over the next two years. The bank’s profitability is also expected to improve, with a ROTCE of 12.4% forecasted for 2026.
In summary, Motta’s assessment points to a positive outlook for Popular, Inc., with shares trading at a 25% discount to the KBW Regional Banking Index (KRX) despite its strong earnings performance and potential for increased profitability and capital flexibility. The revised price target of $129 reflects this confidence.
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