On Tuesday, Piper Sandler adjusted the price target for HBT Financial, Inc. (NASDAQ: NASDAQ:HBT) shares, raising it to $25.00 from the previous $21.50, while keeping a Neutral rating on the stock.
The adjustment follows HBT Financial's robust second-quarter performance and the company's potential to mitigate future Net Interest Margin (NIM) compression in the event of changes in Federal Reserve policy.
The firm's analyst highlighted HBT's ability to withstand NIM fluctuations due to several factors that could act as protective levers. This resilience, coupled with the company's various strengths, is cited as justification for a higher forward Price-to-Earnings (P/E) ratio compared to its peers.
The new price target implies a 6% upside from the stock's closing price on the day of the announcement and is based on a 12.0x multiple of the firm's estimated 2025 earnings per share (EPS), which is an increase from the previous multiple of 11.3x used for peer group comparison.
The analyst also reiterated a positive stance on HBT Financial as a defensive investment option, emphasizing its superior profitability, solid credit quality across different economic cycles, a strong deposit base, and the potential for capital flexibility. This flexibility may allow for additional mergers and acquisitions to boost future earnings.
In addition to the price target update, Piper Sandler maintained its 2024 earnings estimate for HBT Financial at $2.25 per share. The firm also increased its 2025 earnings estimate to $2.10 per share, marking a 2% rise, to reflect anticipated improvements in operating expenses.
In other recent news, HBT Financial has been the subject of two analyst upgrades. Raymond James upgraded the company's shares from Market Perform to Outperform, citing the bank's disciplined credit culture and potential for future mergers and acquisitions. The firm also set a new price target of $23.00.
On another note, Piper Sandler raised its price target for HBT Financial to $21.50 from the previous $21.00, maintaining a Neutral rating on the stock. This revision followed the bank's solid first-quarter results and its ability to mitigate potential future net interest margin compression.
Piper Sandler also increased its earnings per share estimates for HBT Financial for 2024 and 2025 to $2.25 and $2.05 respectively. These recent developments highlight the growing confidence in HBT Financial's prospects, with both Raymond James and Piper Sandler emphasizing the bank's strong profitability and potential for growth.
InvestingPro Insights
Piper Sandler's recent price target adjustment for HBT Financial, Inc. (NASDAQ: HBT) echoes a positive outlook that is also reflected in some key metrics and analyst sentiments available on InvestingPro. With a robust second-quarter performance as the backdrop, there are additional insights worth considering:
InvestingPro data shows HBT Financial with a P/E ratio (adjusted for the last twelve months as of Q2 2024) standing at 11.15, which, combined with a PEG ratio of 0.53, suggests the stock may be trading at a low price relative to near-term earnings growth potential. This aligns with the Piper Sandler's assessment of the company's ability to manage NIM fluctuations and its potential for higher forward earnings. Additionally, the stock has shown a commendable return of 26.51% over the last month, indicating strong recent performance that investors may find appealing.
On the analyst front, InvestingPro Tips reveal that three analysts have revised their earnings upwards for the upcoming period, which could signal confidence in HBT's financial prospects. Furthermore, while the stock is trading near its 52-week high, indicating market optimism, the RSI suggests it is in overbought territory, which could merit caution among potential investors considering entry points.
For those looking to delve deeper into HBT Financial's performance and prospects, InvestingPro offers additional tips to guide investment decisions. Use coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription for access to these insights. Currently, there are 9 additional InvestingPro Tips available for HBT Financial, which can provide a more comprehensive understanding of the company's investment potential.
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