On Thursday, Piper Sandler adjusted its price target for Popular, Inc. (NASDAQ:BPOP), a financial services provider, reducing it to $100.00 from the previous $112.00. However, the firm maintained its Overweight rating on the stock.
The adjustment follows Popular's third-quarter earnings report, which revealed earnings per share (EPS) of $2.16, or a core EPS of $2.15 that excludes net securities gains. The reported EPS fell short of expectations due to a combination of lower net interest income (NII), which was down by $0.11, and higher provisioning, up by $0.14.
The company's lower NII was a focal point, leading to a downward revision of the 2025 run rate and raising concerns about potential further deposit outflows that could negatively impact NII. A significant detail from the quarter was the $1.9 billion in deposit outflows, with nearly half originating from the low-cost Puerto Rico retail segment.
These results contributed to a consecutive quarterly reduction in the full-year NII guidance, now adjusted from an 8-10% range to 6-7%, and a lowered return on tangible common equity (ROTCE) target for the end of 2025.
In terms of other financial trends, Popular experienced a loan growth of 1.7% over the last quarter. Credit quality remained relatively stable, although there was a slight increase in consumer net charge-offs (NCOs) and a minor buildup in Puerto Rico loan reserves.
Additionally, the company has begun to act on its $500 million share repurchase authorization announced in July, having bought back 599,000 shares for $58.8 million during the quarter.
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