Renasant stock price target raised to $44 at Raymond James

On Thursday, Renasant Corp (NYSE: NYSE:RNST), a regional bank with a market capitalization of $2.41 billion, received an updated price target from Raymond (NSE:RYMD) James, now set at $44.00, up from the previous $44.00, while the firm maintained its Outperform rating on the bank’s shares. The revision follows Renasant’s fourth-quarter 2024 performance, which surpassed expectations on a core earnings per share (EPS) basis. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value assessment.

Renasant’s net interest margin (NIM) remained stable, defying projections of a decrease and contributing to a higher net interest income. The loan loss provision reported was also lower than anticipated, reflecting an improvement in credit trends. The bank’s loan growth outperformed forecasts, and profitability metrics showed enhancement, with tangible book value (TBV) increasing by 1.3% to $26.36. Trading at an attractive P/E ratio of 11.45x and offering a 2.32% dividend yield, the bank has maintained dividend payments for 32 consecutive years, as highlighted by InvestingPro.

Despite these positive aspects, Renasant faced some challenges during the quarter. Core fee income fell short of expectations, and core noninterest expenses exceeded predictions, partly due to a few elevated items. Deposit growth did not meet forecasts, although the bank successfully paid off its remaining $126.8 million in brokered deposits. The noninterest-bearing deposit mix contracted, and most capital ratios saw a decline. For deeper insights into Renasant’s financial health, which InvestingPro rates as GOOD with a score of 2.61, subscribers can access the comprehensive Pro Research Report, available exclusively on the platform.

Raymond James analysts have a positive outlook on the risk-reward balance for Renasant, particularly in light of the potential early closure of its pending acquisition of The First Bancshares (NYSE:FBMS), which mirrors the timely completion of several other recent deals. The firm anticipates modest expansion in the NIM and low single-digit growth in noninterest expenses, leading to an increase in EPS estimates for Renasant. The stock has shown strong momentum with a year-to-date return of 5.87%.

In other recent news, Renasant Corporation has reported strong earnings of $72.5 million or $1.18 per diluted share for the third quarter. This was significantly boosted by an after-tax gain of $39 million from the sale of an insurance agency. Additionally, the company experienced an increase of $6 million in net interest income due to higher loan yields, and total deposits grew by over $285 million.

Furthermore, Renasant has announced the adoption of amended and restated bylaws and received approval for a merger with The First Bancshares, Inc. This merger, which received overwhelming shareholder support, is expected to close in the first half of 2025.

In other developments, Keefe, Bruyette & Woods (KBW) maintained their Outperform rating on Renasant, noting the recent acquisition of First Bancshares is anticipated to enhance Renasant’s profitability. The acquisition is also expected to strengthen Renasant’s balance sheet and provide a compelling risk/reward proposition for investors.

Renasant Corporation has also announced significant executive leadership changes, including the transition of C. Mitchell Waycaster from his CEO role as part of a succession strategy. Waycaster’s salary will be adjusted to 60% of its value prior to the transition date. He will also receive a $100,000 retention bonus and equity awards for 2025 and 2026.

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