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Investing.com - Piper Sandler raised its price target on BCB Bancorp (NASDAQ:BCBP) to $9.50 from $9.00 on Wednesday, while maintaining a Neutral rating on the stock. According to InvestingPro data, the stock currently trades at $8.38, with a relatively high P/E ratio of 44x, suggesting premium valuation levels despite trading 40% below its 52-week high of $14.04.
The bank’s shares have been trading at a significant discount to tangible book value per share, primarily due to investor concerns about credit quality. BCB Bancorp reported a steep first-quarter net loss driven by a large specific reserve against a cannabis loan. Despite these challenges, the bank maintains a notable 7.6% dividend yield and has consistently paid dividends for 20 consecutive years, as highlighted by InvestingPro analysis.
Net charge-offs remained elevated in the second quarter at 78 basis points, up from approximately 50 basis points in previous periods. Non-performing loans and classified loans continued to increase to 3.5% and 9.2% of total loans respectively, though these increases were less severe than in recent quarters.
Piper Sandler noted that some "credit noise" is expected to continue through the second half of 2025 as the bank completes a portfolio review under a revamped risk rating framework. This will likely result in continued elevated provisioning for loan losses.
The investment firm expects investor caution to keep BCB Bancorp shares trading within a limited range at discounted levels for the near term.
In other recent news, Keefe, Bruyette & Woods adjusted their outlook on BCB Bancorp by lowering the stock’s price target to $9.50 from a previous $10.50. The research firm maintained a Market Perform rating for the bank. This decision comes amid ongoing credit challenges faced by BCB Bancorp. Specifically, non-performing assets are reported at 3.50%, while net charge-offs have reached 0.78%. These figures highlight the credit concerns that continue to affect the bank. Despite these challenges, the rating indicates a neutral stance from the analysts. The recent developments underscore the importance of monitoring credit health for investors.
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