On Friday, Raymond (NSE:RYMD) James analyst Michael Rose increased the price target for South State Corporation (NYSE:SSB) shares to $120 from the previous $110, while maintaining an Outperform rating. According to InvestingPro data, analyst targets now range from $106 to $135, with the stock trading at $102.75. The revision follows South State's fourth-quarter 2024 results, which surpassed both Raymond James' forecasts and the consensus on core earnings per share (EPS) and pre-provision net revenue (PPNR). The positive earnings report, along with an optimistic update provided during today's earnings call, has led to a rise in the bank's stock, which currently commands a market capitalization of $10.4 billion.
South State's stock had previously experienced a significant surge following the announcement of its acquisition of Independent Bank (NASDAQ:INDB) last May, with the market recognizing the financial and strategic value of the transaction. The bank, which InvestingPro analysis shows has maintained dividend payments for 28 consecutive years and raised them for 13 straight years, trades at a P/E ratio of 15.7x. Despite this, the stock underperformed after the elections, as investors shifted their focus to other opportunities and expressed caution regarding the deal's assumptions amid changing interest rates.
However, management addressed these concerns during today's call, highlighting measures taken prior to the ahead-of-schedule completion of the Independent Bank acquisition on January 1, 2025. These actions are expected to contribute to net interest margin (NIM) expansion, a boost in fee income, and continued growth in core loans and deposits. Additionally, credit trends remain favorable.
Furthermore, management suggested that the company's revenue guidance may be conservative. If the yield curve steepens further and additional rate cuts are implemented, the benefits to correspondent banking and NIM could be greater than anticipated, excluding the effects of ongoing fixed asset repricing.
The analyst's positive outlook is also supported by expectations of high profitability as cost savings from the acquisition are realized. Consequently, Raymond James has raised its 2026 EPS estimate for South State, leading to the $10 increase in the price target to $120. This reflects the firm's confidence in the bank's risk/reward profile going forward. For deeper insights into South State's valuation and growth prospects, InvestingPro subscribers can access comprehensive financial health scores and additional ProTips in the detailed Pro Research Report, which provides expert analysis of key metrics and growth drivers.
In other recent news, SouthState Corporation has reported its Q4 earnings, surpassing analyst expectations with an adjusted earnings per share of $1.93, notably higher than the forecasted $1.66. This was accompanied by a rise in revenue to $450.32 million, exceeding the anticipated $435.94 million. Notably, SouthState saw a growth in loans and deposits, with total loans growing 4% annualized to $33.9 billion and deposits increasing at the same rate to $38.1 billion. The company's net interest income also saw an increase to $370 million in Q4, up from $351.5 million in Q3, and the net interest margin expanded to 3.48%, compared to 3.39% in the prior quarter. Additionally, SouthState reported a net income of $144.2 million for the quarter. The company also completed its merger with Independent Bank Group (NASDAQ:IBTX) at the start of the year. These are among the recent developments that have taken place at SouthState Corporation.
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