On Wednesday, Keefe, Bruyette & Woods updated their outlook on Popular, Inc. (NASDAQ:BPOP), increasing the stock's price target to $110 from the previous $103. The firm maintained an Outperform rating on the shares. The adjustment came after Popular, Inc. reported first-quarter earnings that exceeded market expectations, particularly in pre-provision net revenue (PPNR).
The financial institution's performance stood out with a notable net interest income (NII) growth, which was among the strongest seen this quarter. The analyst noted that Popular, Inc.'s shares outperformed the market by approximately 225 basis points, with a 3.4% increase compared to the 1.1% rise of the KBW Regional Banking Index on the day of the earnings release.
Despite a slight adjustment to tax rate guidance, the company's forecasts for other financial metrics remained unchanged after the quarter. The analyst highlighted the potential for future positive revisions, especially in terms of NII. Current estimates sit at the conservative end of the company's guidance range, with a 10% increase expected in fiscal year 2024 compared to the company's projection of 9-13%.
The firm has also revised its 2025 earnings estimate upward by 9%, aiming to align more closely with Popular, Inc.'s fourth-quarter 2024 run-rate. This revision is part of an effort to bridge the gap to the company's 14% return on tangible common equity (ROTCE) target for the fourth quarter of 2025.
The revised price target of $110 reflects the firm's confidence in Popular, Inc.'s continued financial performance and the robust growth trajectory indicated by the latest quarterly results. The reiteration of the Outperform rating underscores the firm's positive view on the stock's future market performance.
InvestingPro Insights
Popular, Inc. (NASDAQ:BPOP) has demonstrated a strong track record that may interest investors, as reflected in recent real-time data from InvestingPro. The company has shown a significant return over the last week, with a price total return of 8.67%, and an even more impressive 53.85% return over the past year. This performance is further exemplified by the stock trading near its 52-week high, currently at 97.97% of the peak value.
InvestingPro Tips highlight that Popular, Inc. has not only raised its dividend for 5 consecutive years but has also maintained dividend payments for 10 consecutive years, reflecting a stable return to shareholders. The company's commitment to shareholder value is also seen in its current dividend yield of 2.82%. Analysts are optimistic about the company's profitability, predicting Popular will be profitable this year, a sentiment supported by the company's profitable performance over the last twelve months.
For those looking for more in-depth analysis and additional insights, there are more InvestingPro Tips available for Popular, Inc. at https://www.investing.com/pro/BPOP. To enhance your investment strategy with InvestingPro, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. There are 9 more tips waiting to guide your investment decisions on InvestingPro.
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