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Looking ahead, the revised EPS estimates for Origin Bancorp (NYSE:OBK) take into account its outlook for 2025. These estimates are primarily based on expectations of a higher net interest margin (NIM) and net interest income (NII), as well as reduced noninterest expenses. However, these positive factors are partially offset by a projected decrease in fee income.The analyst's reiteration of a Strong Buy rating on Origin Bancorp stock reflects confidence in the bank's strategic initiatives and its ability to enhance performance through the Optimize Origin program. With an average analyst consensus recommendation of 1.75 (where 1 is Strong Buy and 5 is Strong Sell) and price targets ranging from $35 to $42, the program is set to deliver significant improvements by the end of 2025, which is expected to positively influence the company's financial metrics and stock performance.
Origin Bancorp's shares rose following the revised earnings per share (EPS) estimates that account for the expected benefits of the newly unveiled performance program. With current diluted EPS of $2.43 and analysts forecasting $2.42 for fiscal 2024, the analyst's commentary highlighted that the program should lead to a top quartile performance over time. The positive outlook is further supported by the company's current valuation, which trades at a substantial discount to its peers, with a tangible book value (TBV) multiple of approximately 1.1x compared to peers at around 1.6x. Based on InvestingPro's comprehensive Fair Value analysis, the stock appears to be fairly valued at current levels. Investors seeking deeper insights can access the full Pro Research Report, which provides detailed analysis of Origin Bancorp among 1,400+ US stocks.
The analyst noted that despite the stock's underperformance last year, the bank is showing signs of fundamental improvement. Currently offering a 1.7% dividend yield, the bank maintains strong fundamentals with a debt-to-equity ratio of just 0.18. This improvement is attributed to the significant steps taken to change its fundamental outlook, the management's proven track record of performance above that of its peers, and the bank's growing scarcity and franchise value. Specifically, 74% of its loans held for investment (HFI) and 56% of its deposits are located in Texas, which adds to its strategic value.
Looking ahead, the revised EPS estimates for Origin Bancorp take into account its outlook for 2025. These estimates are primarily based on expectations of a higher net interest margin (NIM) and net interest income (NII), as well as reduced noninterest expenses. However, these positive factors are partially offset by a projected decrease in fee income.
The analyst's reiteration of a Strong Buy rating on Origin Bancorp stock reflects confidence in the bank's strategic initiatives and its ability to enhance performance through the Optimize Origin program. The program is set to deliver significant improvements by the end of 2025, which is expected to positively influence the company's financial metrics and stock performance.
In other recent news, Origin Bancorp has been the subject of various analyst notes and adjustments. Keefe, Bruyette & Woods reiterated an Outperform rating, highlighting the bank's potential for improved profitability, with the expectation of a plan to enhance profitability in its fourth-quarter earnings for 2024. Raymond (NSE:RYMD) James upgraded Origin Bancorp shares from Outperform to Strong Buy, anticipating a positive turnaround in the company's performance in the upcoming fourth-quarter earnings.
DA Davidson adjusted the stock price target for Origin Bancorp to $38.00, while maintaining a Buy rating, citing the company's significant presence in the Texas market and deposit growth as positive factors. Stephens also revised their stock price target for Origin Bancorp to $38.00, maintaining an overweight rating and acknowledging the company's effective cost management and core loan yield growth.
These recent developments come as Origin Bancorp prepares to unveil a detailed plan to boost profitability. The company has also appointed Cecil Jones, a seasoned financial professional, to its Board of Directors, further enhancing its financial reporting and regulatory compliance capabilities. These updates reflect Origin Bancorp's strategic initiatives and ongoing efforts to optimize its financial performance.
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