Piper Sandler has adjusted its outlook on shares of First Western Financial (NASDAQ:MYFW), raising the price target to $20 from the previous $18, while maintaining a Neutral rating on the (NASDAQ: MYFW) stock.
Piper Sandler has also lowered the anticipated EPS to $1.00 from the earlier forecast of $1.25. However, the 2025 EPS estimate remains unchanged at $1.65. According to the firm's analysis released on Monday, the decrease in fees and net interest income (NII) is balanced by reductions in non-interest expenses (NIE) and loan loss provisions (LLPs).
"We lower our 2024E EPS to $1.00 (from $1.25) based on reported results and maintain our 2025E EPS $1.65 as weaker fees and NII is offset by lower NIE and LLPs," said an analyst from Piper Sandler.
The new price target reflects a 12.0 times multiple on the estimated 2025 earnings, which is an increase from the previously used 11.0 times multiple.
This change is attributed to higher market multiples. Despite this increase, the target remains below that of peers with fee-heavy revenue streams, which trade at an average multiple of 13.7 times.
"Our price target goes to $20 (+$2) which reflects 12.0x our 2025E EPS (from 11.0x due to higher market multiples) and below fee-heavy revenue peers (13.7x) based on the credit overhang and despite its ability to gain share in more dynamic markets and large wealth management platform," the analyst had said.
InvestingPro Insights
Piper Sandler's revised outlook on First Western Financial (NASDAQ:MYFW) aligns with some key financial metrics and analyst expectations as reflected in real-time data from InvestingPro. With a current market capitalization of $180.17 million and a P/E ratio of 51.59, MYFW trades at a high earnings multiple, which may suggest investor confidence in future growth or potentially overvalued shares. The company's revenue for the last twelve months as of Q2 2024 stands at $80.15 million, although it has experienced a decline in revenue growth by -20.64% over the same period.
InvestingPro Tips indicate that net income is expected to grow this year, and analysts predict the company will be profitable. This aligns with the company's basic and diluted EPS of $0.36 for the last twelve months as of Q2 2024. Additionally, MYFW's profitability over the last twelve months suggests a solid financial footing, despite weak gross profit margins. It's worth noting that the company does not pay a dividend, which may be a consideration for income-focused investors.
For those looking to delve deeper into MYFW's financial health and potential investment opportunities, InvestingPro offers additional tips to guide decision-making. Readers interested in these insights can use coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, providing access to a comprehensive suite of tools and analysis.
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