On Tuesday, TriCo Bancshares (NASDAQ:TCBK) saw a change in stock rating as DA Davidson downgraded its stance from Buy to Neutral. The firm, however, increased the price target for TriCo Bancshares to $53.00, up from the previous $50.00. The adjustment comes in the wake of the recent U.S. Presidential Election, which has impacted bank trading multiples.
The analyst from DA Davidson noted that the shares of TriCo Bancshares warrant a premium valuation due to their superior performance. Despite this, the firm expresses caution in assigning a higher premium. This reservation is attributed to the bank's potential re-emergence as a buyer in mergers and acquisitions (M&A), which historically has led to underperformance in its share value. Additionally, the bank's rate and growth positioning are considered less compelling when compared to peers that are experiencing higher growth.
The revised price target reflects a less than 15% total return projection for TriCo Bancshares. This forecast has influenced the decision to downgrade the stock to Neutral. The analyst reiterates the belief that the shares should be valued at a premium but recognizes the limitations that may affect their performance.
TriCo Bancshares is a financial institution known for its involvement in the banking sector. The company's stock performance and valuation are closely monitored by investors and financial analysts, particularly in the context of market dynamics and company-specific developments.
The change in rating and price target by DA Davidson provides investors with an updated perspective on TriCo Bancshares, taking into account both its past achievements and future prospects in the competitive banking landscape.
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