On Tuesday, Stephens made an adjustment to the price target for TriCo Bancshares (NASDAQ:TCBK), reducing it to $50.00 from the previous $52.00. Despite the decrease in the target price, the firm maintained an Overweight rating on the shares. The decision followed TriCo Bancshares' third-quarter operational earnings per share (Op. EPS) report, which showed a figure of $0.87. This result surpassed both the analyst's and the consensus expectations, which were $0.77 and $0.81, respectively.
TriCo Bancshares' pre-provision net revenue (PPNR) was reported at $39.6 million. This marked a slight increase of 1.4% compared to the consensus but showed a decrease of 0.9% from Stephens' projections. The firm's estimates for the company have remained mostly stable, with a minor adjustment in the 2025 operational EPS, now set at $3.28, reflecting a 0.5% decrease.
The analyst expressed a positive outlook for the bank's future, anticipating that loan growth is likely to resume in the fourth quarter. The growth outlook for 2025 is particularly optimistic, given the bank's recent success in hiring new personnel. Approximately 10 to 11 bankers, mostly commercial and industrial (C&I) oriented, have been added to the team in the past 45 days.
The net interest margin (NIM) for TriCo Bancshares is expected to remain relatively stable in the near term. However, there is potential for expansion in 2025 as deposits are projected to reprice more significantly, and the company is likely to benefit from latent loan repricing opportunities. With the bank on track to surpass $10 billion in assets by 2025, the analyst suggests that potential mergers and acquisitions (M&A) activity could be a focus within the next 6 to 12 months.
In other recent news, TriCo Bancshares has seen significant changes in its stock target. Piper Sandler, a reputable financial services firm, adjusted its outlook on TriCo Bancshares shares. The firm lowered its price target from $53.00 to $50.00, while maintaining an Overweight rating on the shares. This adjustment comes after revised earnings per share (EPS) estimates for the years 2024 and 2025, now projected to be $3.40 and $3.35, respectively. The revision is primarily due to an anticipated decrease in net interest income.
Despite this, TriCo Bancshares continues to maintain a premium valuation relative to its peers due to its conservative credit practices, high reserves, and strong capital position. In a separate development, Piper Sandler raised its price target for TriCo Bancshares from $47.00 to $53.00 based on revised earnings forecasts for 2024 and 2025.
InvestingPro Insights
To complement Stephens' analysis, recent data from InvestingPro offers additional context for TriCo Bancshares' financial position and market performance. The company currently boasts a market capitalization of $1.45 billion, with a price-to-earnings (P/E) ratio of 12.99, suggesting a relatively modest valuation compared to industry averages.
InvestingPro Tips highlight TriCo Bancshares' strong dividend history, having maintained dividend payments for 32 consecutive years and raised them for 11 straight years. This aligns with the analyst's positive outlook and indicates a commitment to shareholder returns. The company's dividend yield stands at 3.01%, which may be attractive to income-focused investors.
Despite the recent price target reduction, TriCo Bancshares has shown impressive price performance, with a 28.31% total return over the past six months and a 38.87% return over the last year. This robust performance supports the Overweight rating maintained by Stephens.
It's worth noting that InvestingPro calculates a fair value of $55.73 for TriCo Bancshares, which is higher than both the current market price and Stephens' revised target. This suggests potential upside for investors, aligning with the analyst's optimistic view on future growth prospects.
For readers interested in a more comprehensive analysis, InvestingPro offers 8 additional tips for TriCo Bancshares, providing deeper insights into the company's financial health and market position.
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