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On Tuesday, Piper Sandler expressed continued confidence in The Bancorp (NASDAQ:TBBK), reiterating an Overweight rating and a $68.00 price target on the company’s shares. Currently trading at $52.84 with a market capitalization of $2.5 billion, InvestingPro analysis suggests the stock is slightly overvalued relative to its Fair Value. The firm’s stance was buoyed by anticipated growth opportunities and a forecast for The Bancorp to deliver a solid first quarter in 2025. With a P/E ratio of 12.49x and an overall financial health score rated as "GREAT" by InvestingPro, the company shows strong fundamentals. The projected core EPS for Q1 2025 is $1.22, slightly below the consensus estimate of $1.24. Piper Sandler anticipates a robust quarter for fee income growth, particularly expecting consumer fintech fees to nearly double from the last quarter. According to InvestingPro data, the company has demonstrated strong profitability with a return on equity of 27% in the last twelve months. Subscribers to InvestingPro can access 10+ additional exclusive insights and detailed financial metrics about The Bancorp’s performance.
The Bancorp’s Banking-as-a-Service (BaaS) depository business is also expected to continue its strong performance, with a projected Gross Dollar Volume (GDV) growth of 17% year-over-year, surpassing the historical average of around 15%. Despite these positive indicators, Piper Sandler has made minor adjustments to its earnings projections for the current and following year, factoring in an increased likelihood of interest rate cuts as suggested by the forward curve and the institution’s asset sensitivity, albeit reduced.
For the full year 2025, Piper Sandler has set an EPS estimate of $5.22 for The Bancorp, which is slightly lower than the company’s guidance of $5.25, excluding buybacks. The $68 price target remains unchanged and is now based on an estimated FY26 EPS multiple of approximately 11 times, as Piper Sandler updates its valuation methodology to account for the forward-looking financial performance.
The firm’s analysis also acknowledges potential risks that could impact The Bancorp’s stock value, including the possibility of greater credit weakness than anticipated, intensified competition from new market entrants, and the chance of additional regulatory actions that could impose further challenges. With a beta of 1.59 and projected revenue decline of 17% for the current year, investors should note the stock’s higher volatility compared to the market. For a comprehensive risk assessment and detailed financial analysis, access The Bancorp’s full Pro Research Report, available exclusively on InvestingPro.
In other recent news, The Bancorp has received a formal notice from the Nasdaq Global Select Market due to a delay in filing its annual report for the fiscal year ended December 31, 2024. The company must regain compliance within 60 days by filing the overdue report or presenting a plan to Nasdaq. Additionally, Bancorp announced that its financial statements for fiscal years 2022 to 2024 should not be relied upon due to pending audit approvals, and the company is working to file an amended report. Meanwhile, Keefe, Bruyette & Woods maintained an Outperform rating on The Bancorp, despite a delay in the $40 million sale of its Other Real Estate Owned assets. Raymond (NSE:RYMD) James also reiterated an Outperform rating, highlighting positive developments in The Bancorp’s Real Estate Business Lending portfolio. Piper Sandler maintained an Overweight rating, citing confidence in the company’s payments business and the easing pressure on its loan book. These developments reflect ongoing challenges and strategic efforts within The Bancorp to address financial reporting and asset management issues.
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