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Investing.com - Piper Sandler has reiterated its Neutral rating and $110.00 price target on Pinnacle Financial Partners (NASDAQ:PNFP), a $8.77 billion market cap financial institution, following the company’s quarterly earnings report that exceeded expectations. According to InvestingPro data, four analysts have recently revised their earnings estimates upward for the upcoming period.
The financial institution posted stronger-than-anticipated results driven by higher fees, increased net interest income, and a lower provision, which were partially offset by higher expenses primarily from increased incentive compensation that rose to 115% of plan from 100% previously. The company maintains a solid financial profile with a P/E ratio of 18.36 and has shown consistent profitability, maintaining dividend payments for 13 consecutive years.
Pinnacle Financial reported deposit growth of 4.7% on an annualized basis, while end-of-period loans grew by 10.7%, exceeding Piper Sandler’s estimate of 9.0%, which contributed to a 9.5% increase in average earning assets versus the 5.1% projected by the research firm.
The company’s net interest margin improved by 2 basis points quarter-over-quarter and is projected to increase further in the third quarter of 2025, according to the report.
Piper Sandler expects Pinnacle Financial shares to outperform in the near term due to stronger pre-provision net revenue trends and upward guidance revisions, potentially closing the performance gap with the broader market index that has existed year-to-date.
In other recent news, Pinnacle Financial Partners reported impressive second-quarter earnings, surpassing analyst expectations. The Nashville-based bank achieved adjusted earnings per share of $2.00, marking a 23% year-over-year increase, and beating the consensus estimate of $1.91. Revenue for the quarter reached $505 million, exceeding the anticipated $498.64 million. The bank experienced significant loan growth, with loans increasing at an annualized rate of 10.7%, and a notable rise in commercial and industrial loans at a 21.9% annualized rate. Pinnacle’s net interest margin improved to 3.23% from 3.14% the previous year. Noninterest income surged to $125.5 million, up from $34.3 million a year earlier, with wealth management revenues increasing by 16.4% to $32.3 million. Additionally, income from the bank’s investment in Banker’s Healthcare Group rose by 39.3% to $26 million. The bank expanded into the Richmond, Virginia market and hired 38 revenue producers. Pinnacle Financial Partners also reported a 5.5% increase in noninterest expenses, largely due to a 20.7% rise in salaries and employee benefits.
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