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On Wednesday, Piper Sandler, a financial services firm, maintained its Overweight rating on The Bancorp (NASDAQ:TBBK), along with a steadfast price target of $68.00. Amidst a broader market pullback, the firm sees this as an opportune moment to reassert their recommendation on what they consider one of their top banking stock picks. According to InvestingPro data, The Bancorp, currently valued at $2.51 billion, has delivered an impressive 50% return over the past year, though analysis suggests the stock is trading slightly above its Fair Value.
The Bancorp’s stock has been subject to volatility and sustained high short interest, yet the company’s payments business is reported to be performing exceptionally well. This volatility is confirmed by InvestingPro data, which shows a beta of 1.59 and identifies price movements as notably volatile. Despite these fluctuations, the company maintains a "GREAT" financial health score and trades at an attractive P/E ratio of 12.07. Piper Sandler acknowledges the concerns surrounding The Bancorp’s Real Estate Backed Loan (REBL) portfolio, which has been a focal point for bearish sentiment. However, the firm indicates increased confidence regarding this matter, especially as recent market trends have coincided with a slight decrease in long-term interest rates. This development is expected to alleviate some of the pressures on the REBL portfolio.
The analyst from Piper Sandler, Frank Schiraldi, provided insights into the company’s standing, stating, "Growth Story at a Value; With stocks pulling back more broadly, we thought it is a good time to reiterate one of our favorite bank stock ideas, Overweight shares of TBBK." He further elaborated on the current conditions impacting The Bancorp and the reasons for their positive outlook.
Schiraldi’s comments suggest that despite the challenges, The Bancorp’s core operations, particularly in the payments sector, remain strong and are driving the company’s growth. The easing of pressure on the company’s loan book is also seen as a positive development that could potentially contribute to the stock’s performance.
Investors and market watchers will likely continue to monitor The Bancorp’s financial health and market performance, particularly in relation to the REBL portfolio and the payments business, which are key areas highlighted by Piper Sandler in their analysis. For deeper insights into TBBK’s performance and potential, InvestingPro subscribers can access comprehensive research reports, including detailed financial health metrics and 12 additional ProTips that provide valuable context for investment decisions.
In other recent news, The Bancorp reported its fourth-quarter 2024 earnings, with an earnings per share (EPS) of $1.15, aligning with analyst projections. The company’s revenue reached $148.56 million, surpassing the expected $133.01 million. Raymond (NSE:RYMD) James responded by increasing its price target for The Bancorp’s shares to $67 from $60, maintaining an Outperform rating. The Bancorp has also announced ambitious growth targets for its credit sponsorship initiative, aiming to exceed $1 billion by the end of 2025 and approach $3 billion by the end of 2026. Additionally, the company plans a $150 million share buyback in 2025. However, Bancorp has faced some challenges, as it has revised its financial statements for fiscal years 2022 to 2024 following a lack of audit approvals. The company is working to address these issues and will file an amended Annual Report with the necessary audit opinions and consents. Investors are advised to await these revised financial statements for accurate financial information.
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