RBC Capital lifts Popular stock price target to $110

On Wednesday, RBC Capital Markets updated its view on Popular, Inc. (NASDAQ:BPOP), raising the price target to $110 from the previous $100, while reaffirming the Outperform rating on the company’s shares. Currently trading at $103.49, the stock has shown strong momentum with an 18.5% return over the past year. The adjustment follows a strong quarterly performance that concluded the year for the financial institution. According to InvestingPro data, analyst consensus remains bullish with a mean target of $116.50.

The analyst at RBC Capital highlighted Popular’s robust capital situation, noting a 16.0% common equity tier 1 ratio. This strong capital foundation, coupled with a "GOOD" overall financial health score from InvestingPro, provides Popular with the flexibility to capitalize on growth opportunities. The bank has maintained dividend payments for 10 consecutive years, with a notable 27.3% dividend growth in the last year. The analyst’s comments underscored the positive impact of U.S. Government disaster relief spending and overall U.S. economic growth on the Puerto Rican economy. In addition, for the first time in many years, Puerto Rico is experiencing net immigration, which is seen as a favorable sign for the local economy.

Looking ahead, the analyst expressed a bullish outlook for Popular, Inc. through the year 2025. Trading at a P/E ratio of 12.1 and delivering a solid 8.9% return year-to-date, the stock appears to be fairly valued according to InvestingPro’s Fair Value model. This optimism is based on the company’s potential to meet its end-of-year 2025 return on tangible common equity (ROTCE) target of 12%. The firm’s financial strategy includes continuing its stock buyback program and increasing its dividend, which are actions that typically signal confidence in a company’s financial health and outlook.

The favorable assessment from RBC Capital comes at a time when Popular, Inc. is poised to leverage economic tailwinds in Puerto Rico. The bank’s ability to navigate the financial landscape with a strong capital position is expected to contribute to its growth and shareholder returns in the coming years. For deeper insights into Popular’s financial health and growth prospects, investors can access the comprehensive Pro Research Report available exclusively on InvestingPro, which provides detailed analysis of the company’s performance metrics and future outlook.

In other recent news, Popular, Inc. has been the subject of an updated outlook by Keefe, Bruyette & Woods (KBW) analyst, Kelly Motta. This follows the company’s robust performance in the fourth quarter of 2024, which led to a price target increase to $129.00 from the previous $116.00, while the Market Perform rating on the stock was maintained. The strong quarter was characterized by a 15 basis point margin expansion and notable growth in end-of-period loans and deposits.

Popular’s guidance indicates a stable pre-provision net revenue outlook, with an expected rise in net interest income offsetting lower fee revenues. Despite the anticipation of higher net charge-offs, the bank’s financial foundation remains solid, as evidenced by a consistent dividend growth track record over six consecutive years.

Recent developments include minor revisions in KBW’s estimates, which remain above consensus due to the bank’s strong financial prospects. Motta projects that the bank’s earnings per share will be more than double that of its peers over the next two years. Furthermore, the bank’s return on tangible common equity is expected to hold steady at 12% for the fourth quarter of 2025 and improve to 12.4% in 2026.

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