Capitol Federal Financial (NASDAQ: NASDAQ:CFFN) has received an updated price target from Piper Sandler.
The firm increased the target to $7.00, up from the previous $6.50, while maintaining a Neutral rating on the stock.
The revision followed Capitol Federal's financial results for the fourth fiscal quarter of 2024, in which the company reported earnings per share (EPS) of $0.09.
This figure surpassed Piper Sandler's estimate by $0.02 and was a penny higher than the consensus among other analysts.
The company's earnings beat was attributed to a couple of key factors. Firstly, Capitol Federal reported a negative provision of $637,000, which contributed $0.01 to the EPS, compared to the $1 million positive provision anticipated by Piper Sandler.
This was supported by what was described as continued excellent credit quality. Additionally, the firm experienced lower expenses than projected, which also enhanced the EPS by $0.01.
Net interest income (NII) for Capitol Federal met the forecasts, with a margin that was slightly stronger than expected. The margin expanded by 3 basis points to 1.80%, versus the 1.79% Piper Sandler had estimated.
Other notable points from the report included a slight decrease in loans and unchanged deposit levels. The efficiency ratio, a measure of a bank's overhead as a percentage of its revenue, improved, dropping by 3 points to 59%.
In other recent news, Capitol Federal Financial's recent earnings report revealed earnings per share (EPS) of $0.07 for the third quarter of the fiscal year 2024, missing the market consensus by $0.04. This shortfall was mainly due to a higher-than-expected tax rate of 38%, impacting the company by $0.03 per share.
The company's net interest income was also lower than forecasted by $0.02 per share, due to a reduced earning asset base and a narrower interest margin. However, the company managed to keep expenses below anticipated levels by $0.01 and reported near 1% growth in loans.
In another development, analysts from Piper Sandler and Keefe, Bruyette & Woods (KBW) have updated their outlook on Capitol Federal Financial. Piper Sandler increased the stock's price target to $7.00 from the previous $5.50, while KBW reduced their fiscal year 2024 and 2025 earnings per share estimates for the company by $0.02 for each year and lowered the stock's price target to $6.00.
Furthermore, Capitol Federal Financial reported quarterly earnings of $0.11 per share, in line with both the consensus and analysts' expectations. The company's net interest margin saw an 11 basis point increase, reaching 1.82%, due to a securities restructuring undertaken in late 2023. However, the company experienced a 3% decline in loans, offset by an 8% increase in deposits from the last quarter.
InvestingPro Insights
Capitol Federal Financial's recent performance aligns with several InvestingPro insights. The company's earnings beat, as reported in the article, is consistent with the InvestingPro Tip that analysts predict the company will be profitable this year. Additionally, the stock's P/E ratio of 20.95 supports another InvestingPro Tip suggesting that CFFN is trading at a low P/E ratio relative to near-term earnings growth, with a PEG ratio of just 0.16.
The article's mention of Capitol Federal's excellent credit quality and improved efficiency ratio is reflected in the company's financial metrics. InvestingPro data shows an operating income margin of 36.23% for the last twelve months as of Q4 2024, indicating strong operational efficiency. Furthermore, the company's dividend yield stands at 5.18%, which may be attractive to income-focused investors, especially considering that CFFN has maintained dividend payments for 26 consecutive years, as noted in another InvestingPro Tip.
For investors seeking a more comprehensive analysis, InvestingPro offers 7 additional tips for Capitol Federal Financial, providing a deeper understanding of the company's financial position and market performance.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.