On Thursday, DA Davidson increased the price target for Fulton Financial (NASDAQ: NASDAQ:FULT) shares to $20.00 from the previous $18.00, while keeping a Neutral rating on the stock. The adjustment follows a positive performance report from the company, which showed a significant uptick in earnings compared to the KRX year-to-date, with a further increase following the release of their earnings report.
The company's shares had already seen an 11.5% rise against the KRX year-to-date before the earnings announcement and climbed an additional 3% upon the release. The positive financial outlook after Fulton Financial's acquisition of FRBK contributed to the improved guidance, with lower than expected loan loss provisions (LLP).
Fulton Financial reported a stronger than anticipated second-quarter net interest margin (NIM), which increased by 11 basis points quarter-over-quarter. This growth was attributed to the recent acquisition and was further bolstered by a solid 5% organic deposit growth, which helped to offset the attrition from FRBK.
The second quarter's earnings beat was driven by a better provision, and the outlook was enhanced due to higher expected earnings per share (EPS). DA Davidson's analyst pointed to these factors as the reasons for the uplifted price target. However, the firm awaits further updates in the third quarter of 2024, which could potentially improve the pre-provision net revenue estimates (PPNRe).
Despite the positive developments, DA Davidson reiterated a Neutral stance on Fulton Financial shares. This caution is due to the below-peer return profile, with an estimated 1.5% pre-provision net revenue return on assets (PPNR ROA) for 2025, and limited upside to the new price target.
In other recent news, Fulton Financial has been the subject of several strategic actions and analyst adjustments. The company completed the sale-leaseback of 40 financial centers, resulting in a pre-tax gain of $20.4 million, and restructured a portion of its available-for-sale securities portfolio, actions that Janney commended, maintaining its Buy rating on the company's stock.
Concurrently, Fulton Financial expanded its operations with the acquisition of FRBK, a move that led Stephens to raise the stock price target for Fulton Financial to $17.50, while maintaining an Equal Weight rating.
The FRBK acquisition also prompted Keefe, Bruyette & Woods to increase its price target on Fulton Financial shares to $19.00, maintaining a Market Perform rating. DA Davidson also adjusted its outlook for Fulton Financial, increasing the price target to $18 from the previous $15 while maintaining a Neutral rating, in light of the FRBK acquisition.
Furthermore, Fulton Financial announced the pricing of its public stock offering at $15 per share, expected to raise $250 million in aggregate.
InvestingPro Insights
Following DA Davidson's recent price target increase for Fulton Financial (NASDAQ: FULT), InvestingPro data shows a robust financial landscape for the company. With a market capitalization of $3.57 billion and a P/E ratio standing at 11.24, Fulton Financial demonstrates a strong value proposition in the market. The company's revenue growth over the last twelve months, as of Q2 2024, is also noteworthy at 4.71%, indicating a steady upward trajectory in its financial performance.
InvestingPro Tips highlight several key aspects of Fulton Financial's recent performance. The stock has experienced a significant return over the last week, with a 12.67% price total return, and it is trading near its 52-week high, at 99.54% of the peak value. Moreover, the company has maintained dividend payments for an impressive 43 consecutive years, showcasing its commitment to shareholder returns, despite a slight dividend growth decrease of -2.86% over the last twelve months. Investors looking for more in-depth analysis can find additional InvestingPro Tips by visiting https://www.investing.com/pro/FULT.
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