On Tuesday, Keefe, Bruyette & Woods adjusted their outlook on shares of HBT Financial (NASDAQ: NASDAQ:HBT), increasing the price target to $27 from $25, while reaffirming an Outperform rating on the company's shares. The firm's decision followed HBT Financial's recent earnings report, which revealed a performance slightly above market expectations.
HBT Financial reported earnings per share (EPS) of $0.57, which not only surpassed the consensus estimate by a cent but also exceeded Keefe, Bruyette & Woods' estimate by three cents. The earnings were bolstered by robust pre-provision net revenue (PPNR), driven by lower expenses and increased spread income. However, provisions for credit losses and taxes partially offset these gains.
The company experienced a turnaround in loan growth after a slow start in the first quarter of 2024, with end-of-period (EOP) balances rising by 5% compared to the last quarter annually (LQA).
Meanwhile, a strategic reduction in non-core deposits resulted in a 4% LQA decrease. Net interest income (NII) benefited from a consistent margin and a larger base of earning assets, while improvements in expenses were noted across the board.
In light of these results, Keefe, Bruyette & Woods has modestly raised their forward EPS estimates for HBT Financial. The new price target of $27 reflects the firm's recognition of HBT's high-tier profitability. The analyst underscored the company's financial performance and potential, leading to the reiterated Outperform rating.
In other recent news, HBT Financial has been making significant strides. The company has been the subject of several analyst upgrades, with DA Davidson lifting its target to $26 following strong Q2 results, while Piper Sandler increased its target to $25, and Raymond James upgraded HBT Financial from Market Perform to Outperform. These upgrades were influenced by the company's solid loan growth, net interest margin levels, and robust second-quarter performance.
HBT Financial's interest in strategic mergers and acquisitions was also highlighted as a positive factor. Analysts from both Raymond James and Piper Sandler emphasized the potential for growth, citing HBT's disciplined credit culture, strong deposit base, and potential for capital flexibility as key strengths.
Furthermore, earnings per share forecasts have been revised upwards. Piper Sandler increased its 2025 earnings estimate for HBT Financial to $2.10 per share, while DA Davidson and Raymond James also demonstrated confidence in the bank's ongoing value proposition to investors. These recent developments underscore the growing confidence in HBT Financial's prospects.
InvestingPro Insights
Following Keefe, Bruyette & Woods' updated outlook on HBT Financial, real-time data and InvestingPro Tips provide additional context for investors considering the company's stock. With a market capitalization of $761.21 million and a P/E ratio standing at 10.52, HBT Financial appears to be trading at a valuation that could attract value investors, especially when considering its PEG ratio of 0.53, which suggests potential for earnings growth relative to its price.
An InvestingPro Tip highlights that analysts have revised their earnings upwards for the upcoming period, aligning with the positive sentiment from Keefe, Bruyette & Woods. Moreover, the stock's performance has been strong, with a notable return of 26.51% over the last month. This could indicate a positive investor sentiment and momentum in the short term, although the RSI suggests the stock is in overbought territory, which could signal caution for potential buyers.
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