Raymond James maintains UBSI Outperform rating, $42 target

On Tuesday, Raymond (NSE:RYMD) James reaffirmed its positive stance on United Bankshares Inc. (NASDAQ: NASDAQ:UBSI) shares, maintaining an Outperform rating with a steady price target of $42.00. The $4.9 billion market cap bank, which according to InvestingPro analysis appears undervalued at current levels, delivered robust first-quarter performance with a strong core return on assets (ROA) of 1.2% and favorable core business trends.

United Bankshares’ recent expansion into the Atlanta market is seen as a strategic move that is expected to significantly enhance the bank’s franchise value. Analysts at Raymond James believe that this expansion mirrors the bank’s earlier successful growth in the Carolinas and will likely drive solid growth for the foreseeable future. The bank’s solid financial health score of "GOOD" from InvestingPro supports this positive outlook.

The bank’s response to the market downturn was also highlighted, with the repurchase of approximately 1% of its outstanding shares. This action reflects United Bankshares’ strong capital position and profitability, complemented by its impressive 36-year streak of consecutive dividend increases and current 4.33% dividend yield. Analysts anticipate that the bank may continue its share repurchase program if the stock price remains around current levels.

United Bankshares’ strategic moves and financial results indicate a robust business model and a commitment to shareholder value. Trading at a P/E ratio of 12.6 and maintaining healthy profitability metrics, the bank’s expansion into new markets, coupled with its financial resilience, underpins the analyst’s confidence in maintaining the Outperform rating and $42 price target.

In other recent news, United Bankshares Inc. reported earnings that showed core pre-provision net revenue surpassing expectations, driven by improved net interest income and operating expenses. The company also noted a 2% increase in deposit growth, despite a slight contraction in net interest margin and minimal loan growth of 0.9%. Analyst firm DA Davidson revised its price target for United Bankshares to $40 from $42, maintaining a Neutral rating, and highlighted the company’s strong credit metrics, including a net charge-off rate of 10 basis points and a high tangible common equity ratio of 11.0%. Piper Sandler also resumed coverage of United Bankshares with a Neutral rating, setting a price target of $38.50, reflecting the bank’s profitability and strategic capital deployment opportunities, including potential mergers and acquisitions. However, Piper Sandler expressed concerns about the bank’s market exposure in the Washington D.C. Metropolitan Statistical Area, which might limit stock performance. Both analyst firms emphasize United Bankshares’ strong financial position and potential for growth through strategic initiatives. These developments underscore the bank’s ability to navigate current market conditions while remaining cautious about geographical risks.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.