Valley National Bancorp stock upgraded to Buy at Jefferies on ROTCE target

Investing.com - Jefferies upgraded Valley National Bancorp (NASDAQ:VLY) from Hold to Buy and raised its price target to $14.00 from $11.00 on Wednesday. The stock, currently trading at $10.81 and near its 52-week high of $11.12, has shown strong momentum with a 20.72% return over the past six months.

The upgrade reflects Jefferies’ confidence that Valley National has a clear path to achieve its 15% return on tangible common equity (ROTCE) target by mid-2028, up from 10% in the second quarter of 2025. The bank, which boasts a 52-year track record of maintaining dividend payments and currently offers a 4.07% yield, trades at a P/E ratio of 13.86.

Jefferies expects this improvement to be driven by net interest margin (NIM) gains, better credit costs, tight expense control, and stronger loan growth, which should help close Valley National’s 15% valuation gap compared to peers. InvestingPro analysis suggests the stock is currently undervalued, with 7 additional exclusive ProTips available for subscribers.

Valley National’s NIM has expanded for five consecutive quarters through Q2 2025, and Jefferies forecasts this positive trend will continue through 2025 and into 2026, with NIM improving from 3.01% in Q2 2025 to 3.27% by Q4 2026, and to 3.38% by Q4 2027.

The $14 price target is based on 11.5 times 2027 earnings per share, discounted to 2026, capturing the peer multiple, according to Jefferies.

In other recent news, Valley National Bancorp reported its Q2 2025 earnings, surpassing analyst expectations. The company achieved an earnings per share (EPS) of $0.23, slightly above the forecasted $0.22. Revenue for the quarter reached $495 million, marginally exceeding the anticipated $494.2 million. These results indicate a positive performance for the quarter. Despite this, Valley National’s stock experienced a slight decline in pre-market trading. Analysts had projected these figures, and the company’s performance aligned closely with these expectations. The earnings and revenue outcomes are key highlights for investors assessing Valley National Bancorp’s recent developments.

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