Keefe reiterates AMAL Outperform, sees buyback as positive

On Tuesday, Keefe, Bruyette & Woods maintained a positive stance on Amalgamated Bank (NASDAQ:AMAL), as the firm’s analyst Christopher O’Connell reaffirmed an Outperform rating with a $45.00 price target. The endorsement follows AMAL’s announcement of a new $40 million share repurchase program. This initiative supersedes the previous buyback plan, which had $18.7 million left as of December 31, 2024, and notably, the new program does not have an expiration date.

O’Connell perceives this development as a sign that Amalgamated Bank might accelerate its share buybacks in the short term, especially considering the recent downturn in the market. The analyst’s remarks suggest that the bank’s upcoming actions could surpass their initial projections for share repurchase activity. InvestingPro data shows the stock has declined 15.02% year-to-date and currently trades at an attractive P/E ratio of 8.35, with technical indicators suggesting oversold conditions.

The new share repurchase authorization is seen as a strategic move by Amalgamated Bank, providing them with the flexibility to repurchase shares at their discretion. The absence of an expiration date offers the bank the opportunity to optimize the timing of these buybacks to benefit the company and its shareholders.

The announcement of the share repurchase program comes at a time when the market has experienced a selloff, which may present a favorable buying opportunity for the bank. By potentially buying back shares at lower prices, Amalgamated Bank could enhance shareholder value and signal confidence in its financial position and future prospects.

Keefe, Bruyette & Woods’ reiteration of the Outperform rating and the maintained price target reflects a continued optimistic outlook for Amalgamated Bank’s stock performance. Investors and market watchers will be closely monitoring how the bank’s buyback strategy unfolds in the coming months.

In other recent news, Amalgamated Bank reported earnings for the fourth quarter of 2024 that exceeded analyst expectations. The bank achieved an earnings per share (EPS) of $0.90, surpassing the anticipated $0.78, and reported revenue of $77.89 million, higher than the forecasted $76.92 million. Additionally, Amalgamated Financial Corp. authorized a new share repurchase program, allowing for the buyback of up to $40 million of its Class A common stock. This decision reflects the company’s confidence in its growth trajectory and financial health.

Piper Sandler recently downgraded Amalgamated Bank’s stock rating from Overweight to Neutral, citing uncertainties related to recent policy announcements by the Trump Administration. These developments include a proposed freeze on funding for environmental initiatives, which could impact the bank’s operations given its focus on socially responsible banking. Despite these challenges, Amalgamated Bank continues to emphasize its commitment to sustainable lending and technology investments.

The bank is also preparing for potential Federal Reserve rate cuts in 2025, which could affect its financial performance. With a strong focus on renewable energy lending, Amalgamated Bank remains poised to capitalize on growth opportunities in this sector. The bank’s strategic initiatives include investments in technology and expanding its trust business, aiming for significant revenue growth in the coming years.

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