On Wednesday, Piper Sandler adjusted its outlook on ACNB Corp. (NASDAQ:ACNB) shares, reducing the bank's price target from $40.00 to $37.00 but retaining a Neutral rating on the stock.
The revision followed ACNB's first-quarter earnings report for 2024, which showed earnings per share (EPS) of $0.80. After accounting for minor securities gains, the core EPS was calculated at $0.79, slightly missing the mark set by both Piper Sandler and the consensus estimate of $0.80.
ACNB's financial performance in the quarter revealed a mix of hits and misses relative to expectations. The bank's provisioning was $0.03 lower than anticipated, which was a positive note. Additionally, fee income exceeded forecasts by a penny, buoyed by improved insurance revenues.
However, these gains were counterbalanced by higher-than-expected operating expenses, which exceeded projections by $0.04, and net interest income (NII) that was a penny below expectations.
The bank's net interest margin (NIM) experienced a notable decline during the quarter. The NIM contracted by 16 basis points, settling at 3.77%, which was a sharper decrease than Piper Sandler had projected. The firm had anticipated a more modest decline of 3 basis points. Despite this contraction, ACNB's loan growth during the period was stronger than expected, providing some balance to the bank's financial dynamics.
The price target adjustment reflects the mixed financial results and the operational challenges faced by ACNB. With the bank's NIM continuing to normalize lower than expected, the revised price target suggests a cautious outlook on the bank's near-term financial trajectory. Piper Sandler's neutral stance remains unchanged, indicating a wait-and-see approach to the bank's stock as the market processes the latest financial data.
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