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On Wednesday, Stephens analyst Terry McEvoy adjusted the price target for Peoples Bancorp (NASDAQ:PEBO), reducing it to $33.00 from the previous $37.50. Despite this change, the analyst maintained an Equal Weight rating on the stock. According to InvestingPro data, the stock currently trades at an attractive P/B ratio of 0.88 and a P/E of 8.49, suggesting potential undervaluation. McEvoy noted that while Peoples Bancorp exhibited positive pre-tax, pre-provision net revenue (PPNR) trends in the first quarter of 2025, these were counterbalanced by higher than expected net charge-offs and credit costs, particularly within the small ticket leasing portfolio. This marks the second consecutive quarter of elevated credit costs.
The net charge-offs (NCOs) for this particular portfolio were approximately 12% in the last quarter and represented 52 basis points for total loans. The management of Peoples Bancorp anticipates that the provision for credit losses will remain high in the second quarter of 2025 before reverting to levels more in line with those seen in 2024. Despite these concerns, there was a decline in criticized and nonperforming loans quarter-over-quarter in the first quarter of 2025. Notably, InvestingPro data shows the company maintains a "GOOD" overall financial health score, with particularly strong marks in relative value and growth metrics.
Contributing to a net interest income (NII) beat, the company benefited from more favorable net interest margin (NIM) performance and a 4% annualized loan growth. The company has demonstrated strong revenue growth of 17% over the last twelve months, as reported by InvestingPro. Additionally, core expenses came in lower than anticipated. The management team at Peoples Bancorp is focused on surpassing $10 billion in assets in a correct manner rather than a rapid one. While they are actively engaging in merger and acquisition discussions and evaluating opportunities, they are prepared to exercise patience. It’s worth noting that the company has maintained dividend payments for 52 consecutive years, showcasing its commitment to shareholder returns.
McEvoy acknowledged the strength of Peoples Bancorp’s underlying PPNR trends but expressed a desire to observe more consistent credit trends before altering the Equal Weight rating. The new price target of $33 reflects the analyst’s adjusted expectations in light of the company’s recent performance and outlook. For deeper insights into Peoples Bancorp’s valuation and growth prospects, investors can access comprehensive analysis and additional ProTips through InvestingPro’s detailed research reports, which transform complex financial data into actionable intelligence.
In other recent news, Peoples Bancorp Inc . reported its Q1 2025 earnings, revealing a slight miss on both earnings per share (EPS) and revenue forecasts. The company posted an EPS of $0.68, falling short of the $0.73 forecast, while revenue came in at $112.35 million, slightly below the expected $112.77 million. Despite these misses, the company demonstrated resilience with a 2% increase in fee-based income and growth in book value per share by 2% to $31.90. The tangible book value per share also improved by 4% to $20.68, indicating strong underlying business performance. The company continues to focus on specialty finance and core banking, and was recognized by Forbes as one of America’s Best Banks 2025. Analysts from Hovde Group and Raymond (NSE:RYMD) James have shown interest in Peoples Bancorp’s loan growth pipeline and fee income guidance, indicating positive expectations for the remainder of the year. Additionally, Peoples Bancorp is exploring merger and acquisition opportunities in regions such as Ohio, Kentucky, and West Virginia. The company’s strategic direction and long-term prospects appear to remain favorable despite the earnings miss.
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