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On Thursday, Raymond (NSE:RYMD) James analyst Mike Rose revised the price target for Origin Bancorp (NYSE: OBK) to $38.00, down from the previous $39.00, while maintaining an Outperform rating on the stock. Currently trading at $31.96, the company maintains a strong Buy consensus among analysts with targets ranging from $39 to $44. The adjustment follows the company’s first-quarter results for 2025, which surpassed expectations in terms of core earnings per share (EPS) and pre-provision net revenue (PPNR). According to InvestingPro, 4 analysts have recently revised their earnings estimates upward for the upcoming period.
Origin Bancorp’s first-quarter performance demonstrated a notable NIM (net interest margin) expansion that exceeded forecasts, helping to offset a decline in average earning assets and contributing to an increase in net interest income (NII). The company also reported lower-than-expected core noninterest expenses and stable credit metrics. With a P/E ratio of 12.11 and a price-to-book ratio of 0.87, the bank shows attractive valuation metrics. Additionally, deposit growth was stronger than anticipated and investment banking costs decreased. Most of the bank’s capital ratios improved, and tangible book value (TBV) grew by 3.3% to $32.43. InvestingPro’s Financial Health Score indicates a FAIR overall rating, with particularly strong scores in relative value and profitability.
Despite these positive developments, the bank faced some challenges, including core fee income falling short of expectations, a slight decrease in noninterest-bearing deposit mix, and contracting loan yields. Origin Bancorp’s outlook for 2025 has been updated to reflect a higher NIM expansion, reduced fee income projections, and lower noninterest expenses compared to previous guidance. The bank maintains a moderate dividend yield of 1.89% and has demonstrated revenue growth of 2.1% over the last twelve months.
Raymond James has kept the EPS estimate for 2025 unchanged, largely due to the positive results of the first quarter. However, the EPS estimate for 2026 has been adjusted downward to account for the expected impact of the Optimize Origin initiative, slower loan and NII growth, and increased credit costs compared to earlier models.
Despite the lowered price target, Raymond James continues to see a positive risk-reward balance for Origin Bancorp. This favorable view is supported by the enhanced benefits from the Optimize Origin program, whose estimated benefits have been increased, the reaffirmation of achieving a +1% return on assets (ROA) by the fourth quarter of 2025, and the bank’s growing scarcity and franchise value, with 71% of loans held for investment and 55% of deposits located in Texas. InvestingPro analysis suggests the stock is currently undervalued, with additional exclusive insights available in the comprehensive Pro Research Report, including detailed financial health metrics and future growth potential.
In other recent news, Origin Bancorp Inc (NYSE:OBK). reported its first-quarter 2025 earnings, surpassing analysts’ expectations with an earnings per share (EPS) of $0.71, compared to the forecast of $0.66. The company’s revenue slightly exceeded projections, coming in at $94.06 million against the anticipated $93.58 million. Origin Bancorp has also initiated the "Optimize Origin" program aimed at streamlining operations, which is projected to bring in benefits worth $23 million. Despite these positive financial results, the company’s stock price experienced a decline, reflecting broader market concerns. The firm has adjusted its loan growth guidance to the lower end of its previous range due to macroeconomic uncertainty. Analysts from Evercore and Raymond James have engaged with the company, noting the challenges and potential opportunities in loan growth and deposit cost management. The company continues to focus on its strategic growth and efficiency, with a commitment to enhancing its net interest margin to 3.5% by the fourth quarter of 2025.
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