Street Calls of the Week
On Wednesday, Stephens analyst Matthew M. Breese revised the price target for Dime Community Bancshares, Inc. (NASDAQ:DCOM) to $32.50 from the previous $36.00, while maintaining an Overweight rating on the stock. Currently trading at $25.82 with a market capitalization of $1.13 billion, the stock has seen a 14.49% decline year-to-date. The adjustment follows the release of Dime Community’s first-quarter earnings for 2025, which surpassed consensus earnings per share (EPS) expectations, driven by a higher-than-anticipated net interest margin (NIM) and reduced credit costs. However, the EPS fell short of Stephens’ own forecasts due to a balance sheet that was smaller than expected, with average securities balances declining over the quarter. According to InvestingPro, the company is expected to maintain profitability this year, with several additional insights available to subscribers.
The company’s management has indicated expectations of increased expenses and a lower NIM in the near term. Consequently, Stephens has revised its operating EPS predictions for 2025 and 2026 downward by 8%-9%, setting them at $2.44 and $3.48, respectively, from the previously estimated $2.65 and $3.82. Notably, InvestingPro data reveals that Dime Community has maintained dividend payments for 29 consecutive years, currently offering a 3.87% yield.
The new price target of $32.50 is based on a 9 times multiple of the projected 2026 EPS and a price to tangible book value (P/TBV) range of approximately 125%-130%. This valuation compares to Dime Community’s less profitable peers, which are valued at around 7 times their projected 2026 EPS and approximately 90% P/TBV.
Despite the lowered EPS estimates and price target, Stephens remains optimistic about Dime Community’s financial outlook. The firm’s positive stance is supported by the expectation of an expanding NIM and improving profitability metrics. Additionally, the analyst highlighted the company’s strong balance sheet quality, which includes above-average demand deposits, solid capital ratios, and robust credit metrics. These factors contribute to the ongoing bullish thesis on Dime Community Bancshares, Inc. InvestingPro analysis suggests the stock is slightly undervalued at current levels, with analyst targets ranging from $32 to $42. For detailed insights, including comprehensive Fair Value analysis and additional financial metrics, investors can access the full Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, Dime Community Bancshares Inc. reported mixed results for its Q1 2025 earnings. The company posted an earnings per share (EPS) of $0.57, which fell short of the expected $0.60. Revenue also missed expectations, coming in at $103.85 million compared to the anticipated $105.71 million. Despite these misses, Dime Community demonstrated strong operational performance, with a notable increase in its net interest margin to 2.9% and significant business loan growth of $60 million in the quarter. Analysts from Raymond (NSE:RYMD) James and Piper Sandler have shown interest in the company’s strategic direction and operational strengths. Furthermore, Dime Community has announced plans to expand into the Lakewood, New Jersey marketplace, indicating growth ambitions. The company also reduced its cost of deposits to 2.09%, showcasing efficient financial management. These developments reflect Dime Community’s ongoing efforts to enhance its operational metrics and strategic footprint.
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