Piper Sandler downgrades Veritex stock to Neutral as merger thesis plays out

Investing.com - Piper Sandler downgraded Veritex Holdings (NASDAQ:VBTX) from Overweight to Neutral while raising its price target to $34.00 from $30.00 on Wednesday. The $1.72 billion market cap bank stock has surged approximately 15% in the past week, with InvestingPro data indicating the stock is currently in overbought territory.

The research firm cited the full realization of its previous Overweight investment thesis following the announcement of Veritex’s merger with Huntington Bancshares (NASDAQ:HBAN) Inc.

Piper Sandler noted that upside in the stock has already been captured through the market’s positive reaction to the merger agreement.

Under the terms of the deal, Veritex will merge into Huntington, with Huntington remaining as the surviving entity.

The firm’s revised price target of $34.00 reflects the current valuation following the merger announcement, which has already driven significant price appreciation in Veritex shares.

In other recent news, Veritex Holdings has reported its first-quarter 2025 earnings, exceeding analysts’ expectations with an earnings per share (EPS) of $0.54, surpassing the forecast of $0.52. Despite a slight revenue shortfall, with actual revenue at $109.73 million versus the expected $110.68 million, Veritex demonstrated strong financial performance. In a significant development, Huntington Bancshares announced plans to acquire Veritex Holdings for $1.9 billion in an all-stock transaction. This acquisition will expand Huntington’s presence in Texas markets, adding approximately $13 billion in assets, $9 billion in loans, and $11 billion in deposits to its balance sheet.

The merger is expected to close in the early fourth quarter of 2025, subject to regulatory approvals. Analyst firm Keefe, Bruyette & Woods maintained its Market Perform rating on Veritex following the acquisition announcement. Additionally, Veritex Holdings held its annual shareholder meeting, where all nominated directors were elected and key proposals, including an amended incentive plan, were approved. Grant Thornton LLP was ratified as the company’s independent registered public accounting firm for the fiscal year ending December 31, 2025. These developments reflect Veritex’s strategic moves and financial health in the current market environment.

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