Keefe, Bruyette & Woods has raised the price target for Seacoast Banking Corporation (NASDAQ: SBCF) to $31.00, up from the previous target of $27.00, with the firm maintaining an Outperform rating on the bank's shares.
The adjustment, which came on Monday, follows Seacoast Banking's reported earnings, which included a two-cent per-share earnings beat, attributed to better-than-expected fees and expenses, along with provision benefits.
The bank's net interest margin (NIM) experienced a slight decline, and growth remained modest. However, an analyst from Keefe pointed out positive signs such as a building pipeline and stabilized deposit costs.
These factors are believed to indicate an upcoming inflection point in pre-provision net revenue (PPNR), which was also a crucial factor in the firm's recent decision to upgrade the bank's rating.
Seacoast Banking has updated its guidance, suggesting that both growth and net interest margin are expected to pick up speed in the second half of 2024. The credit quality was described as mostly clean, although there was a small increase in charge-offs.
The bank's earnings estimates remain relatively unchanged, but there was a slight downward revision for the 2025 earnings estimate to $1.60, incorporating Keefe, Bruyette & Woods' new baseline assumptions.
Seacoast reported strong Q1 results, with a record number of customer acquisitions and an 8% annual deposit growth. The bank also experienced a surge in its wealth management division and solid performance in its SBA team and insurance agency. Despite a 5% decline in net interest income, primarily due to higher deposit costs, Seacoast expects stabilization and growth in the upcoming quarters.
InvestingPro Insights
As Seacoast Banking Corporation (NASDAQ:SBCF) navigates through the financial landscape, current InvestingPro data and tips provide a deeper understanding of the company's market position. With a market capitalization of $2.38 billion and a Price to Earnings (P/E) ratio of 20.38, the bank is trading at a valuation that reflects a premium relative to near-term earnings growth. The P/E ratio has slightly adjusted to 19.96 over the last twelve months as of Q2 2024, indicating a slight shift in valuation.
InvestingPro Tips highlight that Seacoast Banking has successfully raised its dividend for three consecutive years, which could be appealing to income-focused investors. The dividend yield stands at an attractive 2.51%, with the last dividend ex-date being June 14, 2024. This consistent increase in dividends could be seen as a sign of financial health and commitment to returning value to shareholders. Additionally, the bank has experienced strong returns over the last month and three months, with price total returns of 21.4% and 22.79% respectively, showcasing recent positive momentum in its stock performance.
Analysts predict the company will remain profitable this year, which is supported by the bank's profitability over the last twelve months. This aligns with the positive outlook presented by Keefe, Bruyette & Woods. To gain further insights and access additional InvestingPro Tips for Seacoast Banking, interested readers can visit https://www.investing.com/pro/SBCF. There are 6 additional tips available that could help investors make more informed decisions. Moreover, users can take advantage of a special offer using the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
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