Stephens lowers Pinnacle Financial Partners stock price target on merger

Investing.com - Stephens lowered its price target on Pinnacle Financial Partners (NASDAQ:PNFP) to $104.00 from $133.00 on Tuesday, while maintaining an Equal Weight rating on the stock. The move comes as the stock trades at a P/E ratio of 12.16, with InvestingPro data showing 11 analysts have recently revised their earnings estimates upward for the upcoming period.

The price target reduction reflects Stephens’ equal-weighted methodology of price-to-earnings at a target multiple of 10x the present value of 2027 estimates, in line with the median multiple for Category IV banks and similar institutions.

Stephens updated its estimates for Pinnacle’s pending merger of equals with Synovus Financial (NYSE:SNV), raising its 2026 operating EPS estimate to $10.35 from $8.55 and introducing a 2027 estimate of $11.35.

The 2027 estimate represents 22% merger accretion on top of Stephens’ standalone Pinnacle Financial forecast of $9.30 per share.

Stephens’ recent downgrade to Equal Weight reflects what it describes as "heightened execution risk around passing the torch of this differentiated model and creating a Category IV bank where related regulatory and capital relief have not been finalized."

In other recent news, Pinnacle Financial Partners reported impressive second-quarter earnings, with a 23% year-over-year increase in adjusted earnings per share. The company posted earnings of $2.00 per diluted share, exceeding the analyst consensus estimate of $1.91 per share. Revenue for the quarter reached $505 million, surpassing the anticipated $498.64 million. The strong performance was driven by robust loan growth and an expanding net interest margin. Meanwhile, Piper Sandler maintained its Neutral rating on the stock, despite the earnings beat, citing higher expenses due to increased incentive compensation. In related developments, Citi raised its price target for Pinnacle Financial to $140, highlighting the company’s strong loan growth production and favorable hiring trends. Conversely, Stephens downgraded the stock from Overweight to Equal Weight, expressing concerns over Pinnacle’s pending all-stock acquisition deal with Synovus Financial. These developments reflect a mix of optimism and caution among analysts regarding Pinnacle Financial’s future trajectory.

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