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On Tuesday, Raymond (NSE:RYMD) James maintained a positive stance on The Bancorp (NASDAQ:TBBK), reiterating an Outperform rating and a $67.00 price target, which aligns with the broader analyst consensus targeting significant upside potential. According to InvestingPro data, the stock is currently trading at an attractive P/E ratio of 12.5 and appears undervalued based on Fair Value analysis. The firm's analysts highlighted the company's recent regulatory filing as a step towards mitigating risks and addressing investor concerns. The Bancorp's updated 10-K/A filing is seen as a move to comply with NASDAQ's listing requirements and avert the risk of delisting.
The Bancorp has been under scrutiny due to challenges that have been perceived as affirming a negative outlook on the company. Despite recent market pressure causing a 23.6% decline over the past six months, InvestingPro analysis reveals a robust financial health score of "GREAT" and strong profitability metrics, with a 27% return on equity. With the updated filing, the bank has not only demonstrated compliance but also reaffirmed its strong financial performance, as noted by the auditor's opinion. Despite the identification of a material weakness in its financial reporting, The Bancorp has initiated a plan to rectify and improve its internal controls.
Analysts at Raymond James also pointed out the significance of The Bancorp's credit sponsorship initiative, which has contributed positively to its loan loss reserve (LLR) ratio. This initiative is expected to help mitigate credit risk within the company's loan portfolio, particularly in the real estate-backed line of business (REBL), which has been a focal point of short interest.
The firm anticipates that The Bancorp's recent actions will discredit the negative short thesis and alleviate the pressure on its stock. As the bank continues to demonstrate the soundness of its business model and credit quality, with revenue growth of 10.6% in the last twelve months, Raymond James expects a shift in focus towards The Bancorp's Banking-as-a-Service (BaaS) model and its potential for growth. The analysts predict that, barring broader macroeconomic factors, The Bancorp's stock is likely to respond well to these developments. For deeper insights into TBBK's valuation and growth prospects, investors can access comprehensive analysis through InvestingPro's detailed research reports, which cover over 1,400 US stocks.
In other recent news, The Bancorp, Inc. announced the retirement of its Chief Financial Officer, Paul Frenkiel, with Martin Egan stepping in as Interim CFO. Meanwhile, Piper Sandler has maintained an Overweight rating with a $68 price target for The Bancorp, citing anticipated growth in its Banking-as-a-Service business and a solid first quarter forecast. Keefe, Bruyette & Woods also reiterated an Outperform rating, setting a $72 price target despite a delay in a $40 million property sale, which is now expected to close in May 2025. Additionally, Raymond James analyst David Feaster maintained an Outperform rating with a $67 price target, noting positive developments in The Bancorp's Real Estate Business Lending portfolio. The Bancorp has also received a Nasdaq non-compliance notice for a delay in filing its annual report, requiring action within 60 days to regain compliance. Despite these challenges, The Bancorp is working to complete the overdue filing and continue its operational improvements. The company's management remains confident in resolving outstanding issues, including property sales and credit stabilization. These updates highlight the ongoing developments and strategic maneuvers at The Bancorp as it navigates the current financial landscape.
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