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On Monday, Piper Sandler updated its outlook on M&T Bank (NYSE:MTB) shares, raising the price target to $190 from $164 while maintaining an Overweight rating.
The adjustment follows M&T Bank's second-quarter earnings report for 2024, which revealed earnings per share (EPS) of $3.73. After accounting for the FDIC's special assessment and minor securities losses, the core earnings are calculated to be $3.79 per share.
The earnings beat was primarily attributed to an increase in revenues, which was equally driven by fee income and net interest income (NII). The updated full-year guidance suggests a slight improvement in the bank's earnings potential. Additionally, M&T Bank has announced that it will resume share repurchases in the second half of 2024.
Despite the robust financial performance, M&T Bank's shares continue to trade at a modest discount compared to its peers, even though the bank has historically enjoyed a 1-1.5 times premium. Piper Sandler's stance on the bank's shares remains positive, citing the strong profitability as a key factor.
The firm also anticipates further positive developments for M&T Bank, including an expected increase in share repurchases leading into the start of 2025. Furthermore, a continued and significant reduction in criticized and classified loan balances is anticipated in the upcoming quarters. With commercial real estate (CRE) balances nearing sustainable levels, the bank is also projected to experience a pickup in loan growth in the next year.
InvestingPro Insights
In light of Piper Sandler's optimistic outlook on M&T Bank (NYSE:MTB), current data from InvestingPro provides additional context for investors considering the bank's stock. With a market capitalization of $27.57 billion and a price-to-earnings (P/E) ratio of 12.25, M&T Bank appears to be valued in line with its recent earnings performance. A noteworthy InvestingPro Tip indicates that the bank has maintained dividend payments for an impressive 46 consecutive years, showcasing its commitment to shareholder returns. Additionally, analysts predict the company will remain profitable this year, aligning with Piper Sandler's positive stance.
Investors should also consider the company's revenue of $8.473 billion over the last twelve months as of Q2 2024, despite a slight decline in revenue growth during the same period. The dividend yield stands at a solid 3.27%, which may appeal to income-focused investors. For those seeking further insights, InvestingPro offers a wealth of additional tips on M&T Bank; a visit to https://www.investing.com/pro/MTB reveals there are 5 more InvestingPro Tips available. Interested readers can use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, unlocking in-depth analysis and data to inform their investment decisions.
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