Valley National Bancorp stock rating upgraded by Morgan Stanley on balance sheet strength

Published 03/07/2025, 10:12
Valley National Bancorp stock rating upgraded by Morgan Stanley on balance sheet strength

Investing.com - Morgan Stanley (NYSE:MS) upgraded Valley National Bancorp (NASDAQ:VLY) from Equalweight to Overweight on Thursday, while raising its price target to $11.00 from $10.00. The $5.2 billion regional bank has shown impressive momentum, with shares delivering a 46.5% return over the past year according to InvestingPro data.

The upgrade reflects Valley National’s significant actions over the past 12 months to strengthen its balance sheet, reduce commercial real estate concentration, increase reserve ratios, and build capital.

Morgan Stanley noted the bank has successfully lowered deposit costs to improve net interest margin, with additional improvement expected when interest rates decrease further.

The firm believes these positive factors are not reflected in Valley National’s current valuation, as shares trade at a 2x discount to peers—their largest discount in nearly a year.

Morgan Stanley’s $11 price target applies a 10x target P/E multiple to its 2026 EPS estimate of $1.14, suggesting potential upside of 18% for the stock.

In other recent news, Valley National Bancorp reported its Q1 2025 earnings, which fell short of analyst expectations. The company posted an earnings per share (EPS) of $0.18, missing the forecasted $0.19, and revenue of $478.4 million, below the expected $482.3 million. Despite these shortfalls, the bank’s net interest margin increased for the fourth consecutive quarter, and core customer deposits grew by $600 million. In analyst updates, Keefe, Bruyette & Woods maintained a Market Perform rating with an $11 target, citing positive trends in Valley National’s balance sheet and capital strengthening. Jefferies initiated coverage with a Hold rating and a $10 target, recognizing improvements in the bank’s net interest margin but expressing caution due to its transitional phase. Additionally, Valley National disclosed shareholder vote outcomes and the upcoming retirement of President Thomas A. Iadanza, with CEO Ira Robbins set to assume the role of President by June 2025. The bank’s strategic changes and governance updates are part of its ongoing efforts to enhance financial stability and leadership.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2025 - Fusion Media Limited. All Rights Reserved.