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Investing.com - BofA Securities has raised its price target on M&T Bank (NYSE:MTB) to $228.00 from $223.00 while maintaining a Buy rating on the stock.
The price target increase follows M&T Bank’s second-quarter 2025 adjusted earnings per share of $4.22, which exceeded both BofA Securities and consensus estimates of $4.00. The earnings beat was primarily driven by lower credit costs, which decreased 11-13%, and accelerated share buybacks totaling $1.1 billion compared to expectations of $630-665 million.
M&T Bank’s pre-provision net revenue was largely in line with expectations, as stronger fee income growth of approximately 2.5% offset weaker net interest income, which declined by 1.2-1.7%. Management revised the lower end of its fiscal year 2025 net interest income guidance to $7 billion, partially offset by expenses trending toward the lower end of the $5.4-5.5 billion range.
BofA Securities raised its fiscal year 2025 earnings per share estimate to $16.30 from $15.90, driven by the second-quarter beat. The firm also increased its fiscal year 2026 estimate to $19.00 from $18.65, citing a lower expected share count.
M&T Bank shares underperformed peers by approximately 270 basis points following the earnings report, declining 2.4% compared to a 0.3% gain in the BKX Index. BofA Securities views the stock’s valuation as attractive at 10.1x fiscal year 2026 estimated earnings per share versus 17% projected earnings growth.
In other recent news, M&T Bank reported better-than-expected financial results for the second quarter of 2025. The bank’s diluted net operating earnings per share (EPS) reached $4.28, surpassing analyst forecasts of $3.99. Additionally, the company’s revenue exceeded expectations, totaling $2.4 billion compared to the projected $2.39 billion. M&T Bank also executed $1.1 billion in share repurchases during the quarter. Despite these positive earnings results, the stock experienced a slight decline in pre-market trading, reflecting broader market trends. Analysts from firms like TD Cowen noted the bank’s strong performance in trust income, which was a positive surprise this quarter. Looking forward, M&T Bank anticipates its taxable equivalent net interest income to be between $7.0 and $7.15 billion. The bank is also focused on managing its Commercial Real Estate (CRE) loan portfolio and exploring potential mergers and acquisitions.
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