On Tuesday, Piper Sandler updated its outlook on HBT Financial, Inc. (NASDAQ:HBT), increasing the price target to $21.50 from the previous $21.00, while maintaining a Neutral rating on the stock. The adjustment follows HBT Financial's solid first-quarter results and the company's potential to mitigate future net interest margin (NIM) compression, which could occur after a policy change by the Federal Reserve.
The firm's analyst noted the positive aspects of HBT, including its ability to act as a long-term and defensive investment due to its superior profitability, high-quality deposit base, favorable credit quality outlook, and excess capital flexibility. This capital could facilitate additional mergers and acquisitions, potentially enhancing the bank's future earnings power.
Piper Sandler also revised its earnings per share (EPS) estimates for HBT for the years 2024 and 2025. The estimates were increased to $2.25 and $2.05, marking a 2% and 3% rise, respectively. The new price target is based on a multiple of 10.5 times the firm's estimated 2025 earnings per share, which remains unchanged. This valuation continues to represent a premium compared to the peer group average of 9.1 times, justified by HBT's strong profitability and optimistic credit quality projections.
InvestingPro Insights
As HBT Financial, Inc. (NASDAQ:HBT) garners a revised price target from Piper Sandler, current real-time metrics from InvestingPro provide additional context for investors. The company's market capitalization stands at a robust $598.43 million, and with a P/E ratio of 8.24, it appears modestly valued against its earnings. This is further nuanced by the adjusted P/E ratio over the last twelve months as of Q4 2023, which is slightly higher at 8.51, indicating a stable valuation over the recent period.
InvestingPro Data also shows a healthy revenue growth of 21.1% for the same period, though the quarterly figure has seen a slight decline of -2.9%. These figures suggest that while HBT's revenue is growing year-over-year, there may be short-term fluctuations that investors should consider. Moreover, with a dividend yield of 4.01%, HBT stands out as a potentially attractive option for income-focused investors, complemented by a strong dividend growth of 18.75% over the last twelve months.
Adding to the financial narrative, two InvestingPro Tips highlight areas of interest. While HBT is trading at a high P/E ratio relative to near-term earnings growth, analysts predict the company will be profitable this year. This is corroborated by HBT's profitability over the last twelve months. However, the company does suffer from weak gross profit margins, a factor that investors may want to monitor closely.
For those seeking a more comprehensive analysis, InvestingPro offers additional insights on HBT, which can be accessed through their platform. Prospective users can take advantage of an exclusive offer using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. With more tips available on InvestingPro, investors can deepen their understanding of HBT's financial standing and future prospects.
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