On Wednesday, Stephens, a financial services firm, adjusted its price target for CrossFirst Bankshares (NASDAQ:CFB), decreasing it to $17.00 from the previous $18.00. Despite the reduction, the firm has kept an Overweight rating on the bank's shares.
CrossFirst Bankshares reported its first-quarter results for 2024, which included strong loan and deposit growth. These factors contributed to earnings per share (EPS) that surpassed the consensus forecast. However, the bank's pre-provision net revenue (PPNR) fell short of expectations due to higher operating expenses, attributed to several non-recurring items.
The unchanged outlook for 2024 suggests that CrossFirst Bankshares is anticipated to exhibit positive year-over-year PPNR growth. This is notable within the banking industry, which is currently facing challenges from rising deposit costs.
Credit trends for the bank in the first quarter remained relatively stable, with lower net charge-offs (NCOs) and nonaccrual loans being balanced by an increase in other real estate owned (OREO) and classified loans.
Stephens highlights the bank's potential to return capital to its shareholders through repurchase activities and possibly through a common cash dividend in the coming year. The revised $17 price target is based on 11 times the firm's 2025 operating EPS forecast of $1.52 and 1.1 times the 12-month trailing book value per share (TBVPS) forecast.
The Overweight rating reiterated by Stephens reflects a positive stance on CrossFirst Bankshares' stock, suggesting confidence in the bank's performance and growth prospects despite the recent adjustments in financial targets.
InvestingPro Insights
Amid the adjustments by Stephens, it's worthwhile to consider some key metrics and insights from InvestingPro that could provide additional context for investors eyeing CrossFirst Bankshares. The company boasts a high shareholder yield and is trading at a low P/E ratio of 8.79, which is attractive relative to its near-term earnings growth. These factors, coupled with analysts' predictions that the company will be profitable this year, underscore its potential as a solid investment. Notably, CrossFirst Bankshares has been profitable over the last twelve months as of Q4 2023.
InvestingPro Data highlights a robust revenue growth of 15.91% over the last twelve months as of Q4 2023, signaling strong business performance. Additionally, the company's operating income margin stands at an impressive 41.69% for the same period. Despite these strengths, CrossFirst Bankshares does not currently pay a dividend to shareholders, which may be a consideration for income-focused investors.
For those interested in delving deeper, there are more InvestingPro Tips available that could further inform investment decisions regarding CrossFirst Bankshares. By using the coupon code PRONEWS24, investors can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, gaining access to a wealth of insights and data to guide their investment strategies.
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