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On Tuesday, Keefe, Bruyette & Woods (KBW) adjusted their outlook on M&T Bank (NYSE:MTB), reducing the price target from $210.00 to $200.00, while maintaining a Market Perform rating on the stock. The adjustment follows M&T Bank’s recent financial performance, which included a smaller balance sheet impacting the analyst’s expectations.
David Konrad of KBW noted that despite a headline miss, M&T Bank delivered a solid quarter. The anticipated Bayview distribution did not take place, which affected projections. However, even without this factor, pre-provision net revenue (PPNR) was nearly on target, missing by just $0.01. The net interest income (NII) was lower than expected by $0.04, attributed to reduced loans and a downsized balance sheet. Core fees also fell short by $0.01.
The revenue shortfall of $0.05 was almost entirely counterbalanced by a $0.04 reduction in expenses. In light of these results, KBW anticipates that consensus estimates will likely decrease due to the lower NII, but these downward revisions might be mitigated by the potential for stronger buyback activity.
Konrad’s commentary underscored the bank’s performance nuances and the factors influencing the revised price target. The Market Perform rating suggests that KBW sees M&T Bank stock as likely to perform in line with the broader market expectations going forward.
In other recent news, M&T Bank reported its first-quarter 2025 earnings, which fell short of analyst expectations. The bank posted earnings per share (EPS) of $3.38, slightly below the projected $3.42, while revenue reached $2.32 billion, missing the anticipated $2.35 billion. Despite these misses, M&T Bank executed $662 million in share repurchases during the quarter and maintained a strong liquidity position. In a related development, DA Davidson analyst Peter Winter lowered the price target for M&T Bank shares to $189 from $205, maintaining a Neutral rating. This adjustment was influenced by the bank’s revised guidance for net interest income in 2025, reflecting expectations of lower loan and deposit levels. M&T Bank has not altered its noninterest expense or fee income guidance, with fee revenues expected to be at the higher end of projections. The bank’s credit metrics showed improvement, with reduced nonperforming assets and criticized loans. M&T Bank continues to target positive operating leverage and has identified potential expense reductions if revenue falls short of expectations.
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