On Monday, Truist Securities made an adjustment to the price target for Glacier Bancorp (NYSE: NYSE:GBCI), bringing it down to $40 from the previous target of $42. The firm maintained its Hold rating on the stock. The revision in the price target was based on a slight change in the forecast for the company's core earnings per share (EPS) for the years 2024 and 2025. The new EPS estimates are set at $1.65 and $2.34, respectively, modified from the earlier projections of $1.53 and $2.37.
The adjustment reflects a balance between lower provisioning and increased operating expenses. Net interest income (NII) predictions remain largely the same, as the shortfall in the first quarter is expected to be compensated by the recent acquisition of HomeTown Bankshares' (HTFL) branches. The forecast for Glacier Bancorp's net interest margin (NIM) for the fiscal year 2024 is at 3.72%, which remains slightly more cautious compared to the management's guidance of around 3.80%.
The analyst's outlook suggests that while there are cash flows from securities and loan repricing, these are likely to be balanced by higher deposit costs, assuming a stable Federal Reserve funds rate through 2024. Despite this, net interest income is anticipated to increase sequentially through 2025 and could see further acceleration if Federal Reserve rate cuts are implemented.
Credit trends for Glacier Bancorp have been positive, and the expectation is that future net charge-offs (NCOs) will continue to perform better than most of the company's peers.
The analyst believes that the stock is nearing a fair valuation, especially when considering its premium valuation and the limited potential for earnings growth in comparison to the expectations of the broader market. The new price target of $40 is based on a multiple of 16.2 times the estimated EPS for the year 2025.
InvestingPro Insights
Following Truist Securities' recent price target adjustment for Glacier Bancorp (NYSE: GBCI), current InvestingPro data and tips provide additional context for investors considering the stock. The company's market capitalization stands at $4.19 billion, with a price-to-earnings (P/E) ratio of 20.1, reflecting investor sentiment on its earnings potential. Notably, the stock has experienced a significant price uptick with a 26.44% return over the last six months, indicating a robust short-term performance despite a 9.82% decline year-to-date.
InvestingPro Tips highlight that Glacier Bancorp has a high shareholder yield and has maintained dividend payments for 40 consecutive years, which could be appealing for income-focused investors, evidenced by a current dividend yield of 3.57%. However, analysts have flagged concerns, revising earnings downwards for the upcoming period and projecting a drop in net income this year. Despite these challenges, the company remains profitable, with analysts predicting it will continue to be profitable this year.
For those looking to delve deeper into Glacier Bancorp's financials and performance metrics, InvestingPro offers additional tips and insights. Be sure to use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, and discover the 5 additional InvestingPro Tips that could help inform your investment decisions.
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