On Tuesday, Keefe, Bruyette & Woods maintained their Outperform rating and a $24.00 price target for MVB Financial (NASDAQ: NASDAQ:MVBF), highlighting a positive outlook despite recent business changes. The firm acknowledged that MVB Financial's departure from the digital asset business negatively impacted the third quarter of 2024 earnings per share (EPS). However, they expressed optimism about the company's future, noting the successful replacement of those deposits with gaming and payment deposits.
The firm expects that MVB Financial's expenses will decrease in the next quarter and believes that the company's regulatory risk has improved. While they have lowered their EPS estimates, they see potential for revenue growth in the company's payments, mortgage, Victor, and core segments going into 2025. They emphasized MVB Financial's current trading at one times tangible book value (TBV) as a basis for maintaining the Outperform rating.
The analyst's statement from Keefe, Bruyette & Woods indicated confidence in MVB Financial's strategic shift, stating, "The exit of the digital asset line of business was a headwind to 3Q24 EPS, but we are encouraged that those deposits were replaced by gaming and payments deposits, expenses will come down next quarter, and we believe the regulatory risk has improved." This reflects a positive outlook on the company's ability to navigate through changes in its business model.
Furthermore, the firm's anticipation of revenue momentum in various segments of MVB Financial's business suggests a robust strategy for growth. The focus on payments, mortgage services, Victor, and core growth areas is expected to contribute to the company's performance in the coming year.
In summary, Keefe, Bruyette & Woods reiterated their positive stance on MVB Financial, citing the company's successful transition in deposit strategy and potential for reduced expenses and regulatory risk. The firm's outlook remains optimistic, with expectations of revenue growth across key business segments into 2025, supporting their decision to maintain the Outperform rating and $24.00 price target.
InvestingPro Insights
Recent data from InvestingPro adds depth to the analysis of MVB Financial (NASDAQ: MVBF). The company's market capitalization stands at $288.18 million, with a P/E ratio of 15.42, indicating a relatively modest valuation compared to its earnings. This aligns with Keefe, Bruyette & Woods' observation of MVB Financial trading at one times tangible book value.
InvestingPro Tips highlight that MVB Financial has maintained dividend payments for 17 consecutive years, demonstrating a commitment to shareholder returns despite business changes. This could be particularly appealing to income-focused investors. Additionally, the company has shown a significant return over the last week and a strong return over the last month, with price total returns of 17.97% and 15.59% respectively. These recent performance metrics suggest that the market may be responding positively to the company's strategic shifts and future outlook, as discussed in the analyst report.
It's worth noting that InvestingPro offers 8 additional tips for MVB Financial, providing investors with a more comprehensive analysis of the company's financial health and market position. To gain access to these insights and more detailed financial metrics, investors may consider exploring the full range of data available on InvestingPro.
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