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On Wednesday, Piper Sandler initiated coverage on CF Bankshares (NASDAQ:CFBK), currently trading at $23.95 with a market capitalization of $156 million, with an Overweight rating, accompanied by a price target set at $29.00. The new rating reflects the firm’s positive outlook on the bank’s financial prospects, citing an attractive valuation and an improving profitability scenario. According to InvestingPro analysis, the stock appears to be trading above its Fair Value.
The rationale behind the Overweight rating is attributed to several factors. Analysts at Piper Sandler highlighted the bank’s successful navigation of lower interest rates and its strategically positioned franchise in robust Midwestern metropolitan markets. CF Bankshares has cultivated a narrative of organic growth and currently boasts a commercial to consumer mix of approximately 70%/30%. With a footprint in Columbus (WA:CLC), Cleveland, and Cincinnati, Ohio, as well as Indianapolis, Indiana, the bank is well-established in its regions. InvestingPro data reveals that the bank has consistently raised its dividend for five consecutive years, demonstrating commitment to shareholder returns.
Looking ahead to the bank’s financial performance, Piper Sandler has set forth earnings per share (EPS) estimates for the next two years. The firm anticipates CF Bankshares to achieve an EPS of $2.99 in 2025 and $3.43 in 2026. These projections form the basis for the $29 price target, which is pegged at 8.5 times the forecasted 2026 EPS. Currently trading at a P/E ratio of 10.54x, this valuation is a modest discount compared to the bank’s peers, who are trading at an average of 9.1 times their earnings.
The discounted price target relative to peers is justified by what Piper Sandler considers to be the bank’s relatively lower levels of profitability. Despite this cautious note, the firm’s overall assessment remains optimistic about CF Bankshares’ future financial performance.
The announcement of the Overweight rating and price target has provided investors with a forward-looking assessment of CF Bankshares, emphasizing its potential for growth and profitability in the coming years. Piper Sandler’s coverage offers a comprehensive view of the bank’s strategic positioning and financial outlook, laying the groundwork for investor expectations as the bank continues to operate in its key Midwestern markets. For a deeper analysis of CF Bankshares’ financial health, valuation metrics, and additional ProTips, investors can access comprehensive data through InvestingPro.
In other recent news, CF Bankshares Inc. has declared a quarterly cash dividend for both its common and preferred stockholders. The Board of Directors announced a $0.07 per share dividend on common stock and a $7.00 per share dividend on Series D preferred stock, with payments scheduled for April 22, 2025, to shareholders on record by April 14, 2025. This decision underscores the company’s strategy to deliver shareholder value and reflects its financial health. Additionally, CF Bankshares has appointed Plante & Moran, PLLC as its new independent registered public accounting firm for the fiscal year ending December 31, 2025. This change follows the dismissal of the previous auditor, Forvis Mazars, LLP, and is part of the company’s regular corporate governance practices. The transition is contingent upon standard client acceptance procedures and was documented in a Form 8-K filed with the SEC. CF Bankshares reported no disagreements or reportable events with Forvis Mazars during their tenure. This shift ensures an independent perspective on the company’s financial statements for the upcoming year.
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