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On Tuesday, Raymond (NSE:RYMD) James affirmed its Outperform rating and $37.00 price target for Atlantic Union Bankshares (NYSE:AUB), despite acknowledging mixed results in the first quarter, stemming from elevated expenses and an increase in loan loss reserves. According to InvestingPro data, AUB’s stock currently trades at a P/E ratio of 12.3x and has seen a significant 7.8% return over the past week, though it remains down 26.6% over the last six months. The firm noted that Atlantic Union Bankshares’ stock has faced challenges due to its association with the cryptocurrency Dogecoin (DOGE) and its recent acquisition of SASR in the Washington D.C. metropolitan area, which is perceived to increase the bank’s exposure to the volatile asset.
Analysts at Raymond James expressed confidence in the bank’s ability to manage its loan portfolio effectively, even in the event of market stress. They highlighted the conservative underwriting practices of both AUB and SASR. Additionally, analysts pointed out the diversification of the D.C. metro market beyond reliance on the federal government, which they view as a positive factor.
The firm also recognized that nearly half of AUB’s loan book has been marked due to acquisitions, indicating substantial purchase accounting. While investors seek clarity on various metrics, InvestingPro analysis reveals the bank’s strong fundamentals, including a 32-year track record of maintaining dividends and a current yield of 5%. The bank has also demonstrated consistent growth with revenue increasing 16.6% in the last twelve months.
In reiterating their Outperform rating and price target, Raymond James analysts concluded that the stock appears oversold and presents an attractive entry point for investors who are comfortable with the near-term uncertainties related to accounting marks. They emphasized that the current price offers an opportunity for those willing to look past the temporary lack of financial visibility. For deeper insights into AUB’s valuation and growth prospects, investors can access comprehensive analysis and 10 additional ProTips through InvestingPro’s detailed research reports, which transform complex financial data into actionable intelligence.
In other recent news, Atlantic Union Bancshares Corp reported its first-quarter 2025 earnings, which fell short of analysts’ expectations. The company posted an earnings per share (EPS) of $0.57, missing the forecasted $0.72, while revenue was $217.19 million, below the anticipated $221.4 million. Despite these results, Atlantic Union successfully completed the acquisition of Sandy Spring Bancorp (NASDAQ:SASR), expanding its geographic presence in Maryland, Virginia, and North Carolina. The acquisition is expected to enhance the company’s strategic position in these regions. Additionally, Atlantic Union’s net interest margin increased by 12 basis points, and the cost of funds decreased by 18 basis points, reflecting some positive financial adjustments. The company’s recent developments also include a net income of $46.9 million and adjusted operating earnings of $51.6 million. Looking forward, Atlantic Union has set projections for its loan and deposit balances for the full year and anticipates potential Federal Reserve rate cuts in 2025. Analysts from firms such as Morgan Stanley (NYSE:MS) have noted these financial dynamics, providing insights into Atlantic Union’s ongoing strategic and financial adjustments.
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