On Monday, Keefe, Bruyette & Woods updated their outlook on Independent Bank Corp (NASDAQ: NASDAQ:INDB), increasing the price target to $62 from the previous $60, while sustaining a Market Perform rating.
This adjustment comes in the wake of the bank's second-quarter earnings, which showed robust pre-provision net revenue (PPNR) and credit performance.
The firm's assessment noted that Independent Bank Corp's financial guidance for 2024 remains largely unchanged. However, a notable shift in the bank's margin was observed, which is expected to see a modest rise in the second half of 2024.
Based on these developments, the firm has revised its earnings estimates upward by 2% for 2024 and 3% for 2025. The adjustments reflect an anticipated improvement in fees, expenses, and net interest income (NII), particularly in 2025, due to a higher net interest margin (NIM) trajectory.
The analyst's commentary highlighted that while office lease maturities are likely to be a focal point in the near term and could prevent the bank's shares from reaching historical premium levels, the expectation is that the stock will trade in line with its peers.
This outlook is supported by Independent Bank Corp's strong profitability and solid capital levels. The firm's new price target of $62 equates to 1.3 times the tangible book value (TBV) and 12 times the estimated earnings for 2025.
Keefe, Bruyette & Woods' report underscores the bank's solid second-quarter performance and a positive fee and expense outlook, which contribute to the rationale behind the updated price target.
The Market Perform rating indicates that the firm views the bank's stock as likely to perform in line with the broader market.
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