On Tuesday, financial services firm Keefe, Bruyette & Woods adjusted its price target for Lakeland Bancorp (NASDAQ:LBAI), traded on NASDAQ under the ticker NASDAQ:LBAI. The new target is set at $14.15, down from the previous $16.65, while the firm retained a Market Perform rating on the bank's stock.
The reduction in the price target follows Lakeland Bancorp's Q1 earnings, which surpassed expectations due to better-than-anticipated credit results. However, pre-provision net revenue (PPNR) was reported to be slightly below expectations. Despite this, changes to the earnings per share (EPS) forecast were minimal, with the 2024 and 2025 estimates now at $1.21 and $1.61, respectively, a slight decrease from the prior estimates of $1.22 and $1.66.
The focus among investors is primarily on the upcoming financials of PFS, as Lakeland Bancorp has received regulatory approvals and anticipates closing the deal in early to mid-May, contingent on a planned subordinated debt raise. The firm's updated model for PFS assumes that the transaction will be finalized in the second quarter of 2024.
Keefe, Bruyette & Woods' revised price target of $14.15 for Lakeland Bancorp corresponds to 0.8319 times its price target of $17.00 for PFS, following the rounding of figures. This adjustment reflects the firm's latest expectations for the bank's financial performance and market position following the anticipated merger completion.
InvestingPro Insights
Investors seeking a comprehensive understanding of Lakeland Bancorp's financial health can benefit from the latest data and insights provided by InvestingPro. The company's market capitalization stands at a robust $820.94 million, and it boasts an attractive price-to-earnings (P/E) ratio of 9.85, indicating that the stock might be undervalued compared to its earnings. Furthermore, the P/E ratio has slightly improved to 9.73 when adjusted for the last twelve months as of Q1 2024. With a price/book ratio of 0.7, it suggests that the stock is potentially undervalued in terms of its assets.
Two InvestingPro Tips that are particularly relevant to the article and potential investors are: Lakeland Bancorp has demonstrated a commitment to shareholder returns by raising its dividend for 13 consecutive years and has maintained dividend payments for 27 consecutive years. This consistent dividend history could be a strong draw for income-focused investors. Additionally, analysts predict the company will be profitable this year, which aligns with the positive earnings per share forecast mentioned in the article.
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