On Wednesday, Piper Sandler, a financial services firm, increased its price target on shares of M&T Bank (NYSE:MTB). The firm's analyst set the new target at $243, up from the previous $205, while retaining an Overweight rating on the stock.
The analyst's decision to raise the price target is based on an updated earnings model that now accounts for slightly higher loan growth expectations and reduced credit costs, thanks to an improved macroeconomic environment. The new price target is a $38 increase from the former figure and reflects not just the revised estimates but also the higher valuations of peers following the recent election.
The Overweight rating suggests that Piper Sandler expects M&T Bank's stock to outperform the average return of the stocks the firm covers over the next 12 to 18 months. The new price target of $243 implies that the shares are anticipated to trade at approximately 14.5 times the firm's 2025 earnings per share (EPS) estimate a year from now. This is an increase from the previous valuation, which estimated the shares at about 12.5 times the 2024 EPS forecast.
The analyst's comments highlighted the rationale behind the increase: "With the adjustment to our model we are also increasing our price target by $38 to $243 reflecting both the increased estimates as well as much higher peer valuations post-election."
M&T Bank's stock price will be watched closely by investors to see if it aligns with Piper Sandler's projections, as market conditions and company performance continue to evolve.
In other recent news, M&T Bank Corporation has been the focus of significant financial developments. The bank reported a 10% increase in Q3 net income, amounting to $721 million, and saw its diluted GAAP earnings per share rise to $4.02. These results were accompanied by an improved CET1 ratio of 11.54%, and an increase in average loans to $134.8 billion.
Citi, DA Davidson, and RBC Capital Markets have all recently adjusted their stock price targets for M&T Bank. Citi downgraded the stock from Buy to Neutral, but increased the price target to $230. DA Davidson maintained a neutral stance, while raising its target to $207. RBC Capital Markets lifted its target to $208 and maintained an outperform rating.
Looking ahead, M&T Bank projects a fourth-quarter taxable equivalent net interest income of at least $1.73 billion, loan growth reaching approximately $136 billion, and total deposits expected to reach at least $160 billion.
InvestingPro Insights
Recent data from InvestingPro aligns with Piper Sandler's optimistic outlook on M&T Bank (NYSE:MTB). The stock has shown remarkable performance, with a 1-year price total return of 83.54% as of the latest data. This strong momentum is further evidenced by the stock trading at 97.81% of its 52-week high, supporting the analyst's bullish stance.
InvestingPro Tips highlight M&T Bank's consistent dividend history, having maintained payments for 46 consecutive years and raised dividends for 8 years straight. This demonstrates the bank's financial stability and commitment to shareholder returns, which could contribute to the higher valuation multiples mentioned in the analyst report.
The current P/E ratio of 16.25 suggests that the stock is still reasonably valued despite its recent price surge. With a market cap of $36.63 billion and a dividend yield of 2.45%, M&T Bank presents an interesting proposition for value and income investors alike.
For readers interested in a deeper analysis, InvestingPro offers 11 additional tips for M&T Bank, providing a more comprehensive view of the company's financial health and market position.
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