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Investing.com - UBS lowered its price target on South State (NYSE:SSB) to $120.00 from $125.00 while maintaining a Buy rating on the stock, citing a reframed margin outlook that has driven recent share weakness following third-quarter results. Currently trading at $87.91, South State appears undervalued according to InvestingPro analysis, with the stock down 10.06% year-to-date.
Despite the price target reduction, UBS noted that South State demonstrated strong underlying momentum, evidenced by robust loan production and a growing pipeline exceeding $3 billion across its three largest markets. This aligns with the company’s impressive 39.42% revenue growth over the last twelve months and 22% five-year revenue CAGR.
The financial services firm highlighted positive acceleration in fee income and expense discipline at South State, with consolidated pre-provision net revenue estimates moving approximately 2% lower due to net interest margin adjustments. InvestingPro data shows the company trades at a P/E ratio of 12.13 with diluted earnings per share of $7.27, though it suffers from weak gross profit margins.
UBS stated that with South State management focused on organic growth, its estimates of approximately 6% annual loan growth in 2026 and 2027 could be conservative relative to the company’s pipeline in high-growth markets. South State has maintained dividend payments for 29 consecutive years with 11.11% dividend growth and currently offers a 2.73% yield, reflecting management’s commitment to shareholder returns alongside growth initiatives.
The firm maintained its Buy rating on South State stock, suggesting that the margin reset could potentially serve as the reset needed for the stock’s performance. This view is supported by the broader analyst consensus of 1.54 (Buy) with an average 27% upside potential. For deeper insights into South State’s valuation and growth prospects, check out the comprehensive Pro Research Report available on InvestingPro, part of their coverage of 1,400+ US equities.
In other recent news, South State Corp reported its third-quarter earnings for 2025, surpassing expectations with an earnings per share (EPS) of $2.58, compared to the forecasted $2.10. The company also reported revenue of $699 million, exceeding the forecast of $660.72 million. Despite these positive earnings results, the stock experienced a decline, reflecting mixed investor sentiment. Analyst firm TD Cowen adjusted its price target for South State to $120, down from $127, while maintaining a Buy rating on the stock. Piper Sandler also revised its price target to $118 from $121, maintaining an Overweight rating. Both firms acknowledged that South State’s results exceeded expectations, even as the stock underperformed in the market. These developments highlight the ongoing adjustments and assessments from analysts in response to South State’s financial performance.
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