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On Tuesday, RBC Capital Markets adjusted its outlook on M&T Bank (NYSE:MTB) shares, reducing the price target to $200 from the previous $208, while retaining an Outperform rating on the stock. The firm’s analyst, Gerald Cassidy, highlighted the bank’s consistent performance and robust business model as key attributes.
Cassidy praised M&T Bank’s "meat and potatoes" approach to banking, a strategy that has been a hallmark of the institution for over three decades. The analyst attributed this disciplined approach to the legacy of the bank’s former CEO, Bob Wilmers, and noted that it is continued by current CEO Rene Jones. According to Cassidy, this culture has allowed M&T Bank to outperform in terms of credit, especially during economic cycles.
The analyst’s remarks come at a time when credit performance is becoming a focal point for investors, given the current economic uncertainties and geopolitical issues. Cassidy underscored the importance of strong underwriting standards in avoiding credit mishaps, which he believes M&T Bank adheres to diligently.
Furthermore, the bank’s ability to manage its capital effectively was also mentioned as a factor that has historically improved shareholder returns. Cassidy’s comments reflect confidence in M&T Bank’s management and its strategic focus on long-term shareholder value. Despite the reduction in the price target, the Outperform rating suggests that RBC Capital Markets still sees potential for the bank’s stock performance.
In other recent news, M&T Bank reported its first-quarter earnings for 2025, revealing an earnings per share (EPS) of $3.38, which fell short of the forecasted $3.42. The bank’s revenue also missed expectations, coming in at $2.32 billion compared to the anticipated $2.35 billion. Despite these misses, M&T Bank executed $662 million in share repurchases during the quarter. Analysts have adjusted their outlooks following these results. Piper Sandler reduced the stock price target from $220 to $210, maintaining an Overweight rating, while Keefe, Bruyette & Woods (KBW) cut their target from $210 to $200, keeping a Market Perform rating. DA Davidson also lowered their price target to $189 from $205, retaining a Neutral rating. The adjustments reflect concerns over M&T Bank’s reduced net interest income guidance for 2025 due to expected lower average loan and deposit levels. However, the bank anticipates an increase in net interest income throughout the year and remains confident in maintaining fee revenues at the higher end of their projections.
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