On Friday, Keefe, Bruyette & Woods adjusted its stock price target for Regional Management Corp (NYSE: NYSE:RM), a consumer finance company, increasing it to $28.00 from the previous $26.00. The firm has maintained a Market Perform rating on the stock.
The revision follows Regional Management's first-quarter results for the year 2024. In response to these results, the financial services firm has revised its earnings per share (EPS) estimate for 2024 upwards to $4.08 from $3.90, citing lower than anticipated expenses. However, the estimate for the 2025 EPS remains unchanged at $6.25.
The new price target of $28 is based on a forward price-to-earnings (P/E) multiple of approximately 4.5 times for the fiscal year 2025. This represents an increase from the previous P/E multiple of 4.2 times that was used to determine the former price target.
The evaluation by Keefe, Bruyette & Woods reflects an analysis of Regional Management's recent financial performance and the firm's expectations for the company's future earnings potential. The price target adjustment suggests the firm's recognition of Regional Management's cost management efforts and the impact of these on the company's financial outlook.
Regional Management Corp, which specializes in providing a variety of loan products, continues to operate under the Market Perform rating, indicating that the stock is expected to perform in line with the sector or the overall market according to Keefe, Bruyette & Woods' assessment.
InvestingPro Insights
Following the recent price target update by Keefe, Bruyette & Woods for Regional Management Corp (NYSE: RM), InvestingPro data and insights offer additional context for investors. The company's market capitalization stands at a solid $275.32 million, with a price-to-earnings (P/E) ratio of 11.72, indicating a reasonable valuation compared to earnings.
Notably, the adjusted P/E ratio for the last twelve months as of Q1 2024 is slightly higher at 12.25, reflecting the company's earnings in relation to its share price.
Investors may also find the company's revenue growth of 7.02% over the last twelve months as of Q1 2024 promising, coupled with a significant gross profit margin of 59.72%, which demonstrates the company's efficiency in managing its cost of goods sold. Moreover, the company's stock has experienced a strong return over the last three months, with a price total return of 15.87%, showcasing its recent market performance.
For those looking to delve deeper, InvestingPro offers further insights and metrics, including two additional InvestingPro Tips that highlight the company's expected net income growth this year and its liquid assets surpassing short-term obligations. These tips, along with a comprehensive suite of investment tools, can be explored in detail at InvestingPro. Remember to use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, providing even more value to your investment research process.
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