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On Friday, Stephens analyst Matt Olney revised the price target for Business First Bancshares (NASDAQ:BFST) to $32.00, a decrease from the previous $34.00, while maintaining an Overweight rating on the stock. Currently trading at $23.64 with a P/E ratio of 10.58x, InvestingPro analysis suggests the stock is undervalued. The adjustment follows Business First Bancshares’ first-quarter financial performance, which Olney notes surpassed expectations in earnings per share (EPS) and pre-provision net revenue (PPNR).
The company’s strong quarterly results were attributed to an increase in non-interest income, improved net interest income (NII), and reduced operating expenses. With revenue growth of 6.05% in the last twelve months, the bank has demonstrated resilience despite challenges. However, loan growth remained stagnant compared to the previous quarter, a trend seen across the sector, primarily due to high loan repayments.
Despite the flat loan growth, Business First Bancshares’ non-interest income has been notable. It has reportedly beaten consensus forecasts for six quarters in a row, thanks to recent investments. Olney forecasts that the net interest margin (NIM) will continue to expand as the bank increases the pricing on its fixed-rate loan portfolio. However, he anticipates a smaller balance sheet due to more conservative loan growth estimates.
The analyst predicts that Business First Bancshares will accumulate more capital in 2025, potentially leading to an enhanced trading multiple for the bank’s stock. The new price target of $32.00 is based on 12 times Stephens’ 2026 EPS forecast of $2.70 and 1.4 times their 12-month tangible book value per share (TBVPS) forecast. InvestingPro data reveals the company has raised its dividend for 7 consecutive years, with a current yield of 2.37%. The Overweight rating aligns with the broader analyst consensus, as the stock maintains a "Strong Buy" recommendation with price targets ranging from $28 to $33. For deeper insights into Business First Bancshares’ financial health and growth prospects, including additional ProTips and comprehensive analysis, explore the full Pro Research Report available on InvestingPro.
In other recent news, Business First Bancshares Inc. reported impressive financial results for the first quarter of 2025, exceeding both earnings and revenue expectations. The company achieved an earnings per share (EPS) of $0.65, surpassing the forecasted $0.61, and reported revenue of $79.21 million, which was higher than the anticipated $77.54 million. This performance highlights Business First’s strategic investments and operational efficiencies in a competitive banking environment. Additionally, the company completed the sale of a branch in Kaplan, Louisiana, which included $51 million in deposits at a premium of 8%. Analysts from Stephens and Raymond (NSE:RYMD) James have noted the company’s strong start to the year, with a focus on disciplined loan pricing and strategic market presence. Business First continues to invest in IT and infrastructure, maintaining a stable loan portfolio and reducing energy exposure. Looking ahead, the company anticipates low single-digit margin expansion and growth in core non-interest income, supported by a diversified revenue base and enhanced banking capabilities.
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