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On Tuesday, Piper Sandler analyst Stephen Scouten upgraded First Citizens BancShares stock from Neutral to Overweight, setting a price target of $2,250.00. The upgrade follows a notable decline in the bank’s shares, which dropped approximately 7.5% on Monday and have fallen 18% year-to-date, with a total decrease of around 27.7% since February 6th. According to InvestingPro data, the stock currently trades at $1,731.74, with analyst targets ranging from $2,000 to $2,750, suggesting significant upside potential.
Scouten provided insight into the rating change, citing the bank’s potential strategy in response to the recent share price performance. "Given the modest float in the stock and the ~1.15x tangible book value per share (TBVPS) valuation, we expect the bank to be more aggressive and effectual with its share repurchase," Scouten stated. He further estimated that First Citizens could repurchase an additional $6 billion worth of shares through the end of 2026. This aligns with InvestingPro analysis, which highlights management’s aggressive share buyback strategy as a key strength. The stock currently trades at just 1.09x book value, suggesting potential undervaluation.
The analyst also addressed the impact of shifting forward rate expectations on the bank’s recent stock performance. Despite these changes, Scouten expressed skepticism about significant cuts to forward estimates and sees limited downside risk to future earnings projections for First Citizens. InvestingPro data shows the stock’s RSI indicates oversold territory, while the bank maintains strong fundamentals with a P/E ratio of 9.1x and a market capitalization of $23.28 billion. For deeper insights into First Citizens’ valuation and financial health metrics, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
Scouten’s price target of $2,250.00 for First Citizens BancShares stock implies an approximate 11.5 times multiple of the firm’s projected 2026 earnings, or about 1.4 times the projected tangible book value per share a year out. This valuation stands in favorable comparison to the bank’s industry peers, according to the analyst’s assessment.
First Citizens BancShares, traded on NASDAQ under the ticker FCNCA, has not publicly responded to the upgrade or the analyst’s comments at the time of reporting. The bank’s share repurchase plans are anticipated to be a key factor in the stock’s performance in the coming years as outlined by Piper Sandler’s analysis.
In other recent news, First Citizens BancShares reported a strong fourth quarter for 2024, exceeding earnings expectations with an adjusted earnings per share (EPS) of $45.87, compared to the forecasted $39.13. The company expects its net interest income for 2025 to be between $7.1 billion and $7.2 billion. Keefe, Bruyette & Woods raised their price target for First Citizens to $2,600, maintaining an Outperform rating, citing strong loan and deposit growth. Piper Sandler also increased their target to $2,250, while retaining a Neutral rating, after the company’s fourth-quarter results surpassed expectations. Truist Securities lifted its price target to $2,384 from $2,303 and maintained a Hold rating, reflecting higher net interest income and reduced expenses. DA Davidson maintained a Neutral rating with a $2,400 target, noting potential benefits from asset sensitivity and capital return. These developments highlight the bank’s recent performance and future earnings potential amidst broader economic conditions.
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