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On Friday, Stephens analyst Matt Olney adjusted the price target for Third Coast Bancshares Inc (NASDAQ:TCBX), reducing it to $39.00 from the previous $44.00, while maintaining an Overweight rating on the stock. According to InvestingPro data, the stock currently trades at $29.08, suggesting a potential 34% upside to the new target. The bank’s shares have declined 14.34% year-to-date, though they maintain a relatively low P/E ratio of 10.4x. The revision follows Third Coast Bancshares’ recent performance, which included a notable first-quarter earnings beat attributed to increased fees and decreased loan loss provision expenses. This led to a return on assets (ROA) of 1.18%, the highest since the company went public. InvestingPro analysis shows the bank maintains a GOOD overall financial health score, with particularly strong marks in growth and relative value metrics.
Olney’s commentary highlighted Third Coast Bancshares’ successful completion of a $200 million commercial real estate (CRE) securitization early in the second quarter of 2025. This strategic move is seen to lower the company’s CRE and construction & development (C&D) concentration, providing a foundation for future growth and generating fees in the short term.
Despite the positive developments, the revised price target reflects a cautious stance due to prevailing macroeconomic uncertainties. Olney revised the loan growth forecast to align with the midpoint of management’s annual guidance of 5%-8%. The Overweight rating suggests confidence in the company’s prospects, despite a more conservative outlook.
The new price target of $39.00 is based on 12 times Stephens’ 2026 earnings per share (EPS) forecast of $3.26, which is slightly down from the previous estimate of $3.35. Additionally, the target is 1.2 times the 12-month trailing book value per share (TBVPS) forecast provided by the firm. This valuation reflects a balance between Third Coast Bancshares’ solid first-quarter performance and the need for prudence in a time of economic uncertainty. For deeper insights into TCBX’s valuation and growth prospects, including additional ProTips and comprehensive financial metrics, explore the full research report available on InvestingPro.
In other recent news, Third Coast Bancshares Inc. reported its first quarter 2025 earnings, surpassing expectations with an earnings per share (EPS) of $0.78, compared to the forecasted $0.71. Despite this positive earnings surprise, the company’s revenue fell slightly short, totaling $45.9 million against an anticipated $46.15 million. The bank maintained a steady net income of $12.4 million, consistent with the previous quarter, and saw a 12.4% year-over-year increase in net interest income. The net interest margin improved by nine basis points to 3.8%. Additionally, Third Coast Bancshares executed a significant commercial real estate loan securitization, enhancing its balance sheet management and capital ratios. This transaction is expected to benefit the net interest margin by approximately five basis points in the second quarter. Despite the earnings beat, the stock experienced a decline in after-hours trading. The company is also targeting $325 million in loan growth for the year, with plans to evaluate further securitizations to support this goal.
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