On Thursday, Piper Sandler, a financial services firm, increased its stock price target for SY Bancorp (NASDAQ:SYBT) to $69.00, up from the previous $65.50, while maintaining a Neutral rating on the stock. The firm's analyst cited SY Bancorp's robust third-quarter performance and expressed a more optimistic view on the bank's potential to achieve superior operating leverage in the upcoming year.
SY Bancorp's prospects are expected to be driven by mid-single-digit organic balance sheet growth and further net interest margin (NIM) expansion anticipated in the fourth quarter of 2024 and the first quarter of 2025, with the possibility of continued expansion in the second quarter and second half of 2025. The analyst also noted the company's ongoing strong cost discipline and projected low-to-mid-single-digit fee income growth.
The financial institution's credit quality is anticipated to remain relatively benign compared to industry standards. Despite the positive outlook and recognition of SY Bancorp as a top-tier long-term holding due to its various attributes, Piper Sandler has not altered its Neutral rating.
This decision is based on the current premium multiples the shares are trading at, suggesting a more constructive stance could be taken if there were a pull-back in SY Bancorp's relative valuation.
Piper Sandler has adjusted its fourth-quarter 2024 and full-year 2025 earnings per share (EPS) estimates for SY Bancorp, raising them to $1.01 and $4.05, which represent a 3% and 7% increase, respectively. This adjustment reflects expectations of higher net interest income (NII), NIM, and balance sheet growth. Moreover, the firm has introduced a 2026 EPS estimate of $4.25.
The revised price target of $69.00 represents a $3.50 increase and is based on 17.0 times the firm's 2025 earnings estimate. This valuation is consistent with the multiples of SY Bancorp's high-performing peers, which stand at 16.7 times.
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