Raymond James lifts FCCO stock to Strong Buy, target to $30

On Thursday, First Community (NASDAQ:FCCO) Corporation (NASDAQ: FCCO) received an upgraded stock rating from Raymond (NSE:RYMD) James, moving from Outperform to Strong Buy. Alongside the rating change, the firm also raised its price target on the company's shares from $27.00 to $30.00. The upgrade came in response to the bank's fourth-quarter earnings for 2024, which surpassed expectations. The optimism appears well-founded, as InvestingPro data shows the stock has delivered an impressive 37% return over the past year, with three analysts recently revising their earnings estimates upward.

The analyst at Raymond James, Steve Moss, cited several reasons for the optimistic outlook on First Community Corporation. Key among them is the anticipated expansion of the net interest margin (NIM) and pre-provision net revenue (PPNR) growth in 2025. This expectation is based on the upwards repricing of the bank's fixed-rate loan portfolio, which constitutes approximately 85% of its total loans, combined with projected mid-to-high single-digit loan growth. The bank has demonstrated solid fundamentals, with revenue growing at 6.16% and maintaining a 24-year streak of consistent dividend payments. Want deeper insights? InvestingPro subscribers have access to over 30 additional financial metrics and analysis tools.

Steve Moss also noted that even without additional Federal Reserve rate cuts, the financial institution is poised for substantial growth. The analyst's forecast reflects confidence in the bank's ability to expand its margins and revenues, which is a significant factor in the rating upgrade.

In addition to growth projections, the analyst pointed out that First Community Corporation is likely to maintain low credit costs. This is attributed to the bank's strong track record and the resilience of the markets it operates in. The bank's efficient management of credit costs contributes to the positive outlook.

Finally, the valuation of First Community Corporation's shares also played a role in the analyst's decision. At 8.3 times the estimated earnings per share (EPS) for 2026, compared to the peer average of 10.4 times, Raymond James sees a favorable risk-reward scenario. The firm believes that First Community Corporation's shares offer significant value, with above-peer earnings growth and profitability at a below-peer multiple. Currently trading at a P/E ratio of 13.39x with a market capitalization of $187.73 million, InvestingPro analysis suggests the stock is fairly valued, with a high shareholder yield and consistent dividend growth of 7.14% over the last year.

In other recent news, First Community Corporation has showcased strong financial health and growth in its Q4 and full-year 2024 financial results. The company disclosed a Q4 net income of $4.232 million, an increase from the previous year's $3.297 million. The full-year net income reached $13.955 million, compared to $11.843 million in 2023.

Deposits and loan growth also saw a significant increase, with total deposits growing by $164.9 million or 10.9% over the year. Loan growth increased by $86.5 million or 7.6% throughout 2024.

Investment advisory services reported revenue of $1.720 million for Q4 and $6.181 million for the full year. Assets under management increased to $926.0 million as of December 31, 2024, up from $755.4 million at the end of 2023.

A cash dividend of $0.15 per common share was declared for Q4, maintaining the company's record of 92 consecutive quarters of cash dividends. The company's regulatory capital ratios remain well above the minimum levels required, and tangible book value per share increased to $16.93 as of December 31, 2024. These are the latest developments in the company's financial performance.

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