On Friday, Piper Sandler analyst Nathan Race increased the price target for Bank7 Corp. (NASDAQ:BSVN) to $55, up from the previous target of $53, while keeping an Overweight rating on the stock. According to InvestingPro data, Bank7 currently trades at an attractive P/E ratio of 9x, suggesting potential upside based on the platform's Fair Value analysis. This adjustment followed what the analyst described as an unexpected drop in Bank7's share price, which fell 3.2% compared to a smaller 0.8% decline in the NASDAQ Bank Index.
Race expressed that the decline in Bank7's stock was puzzling, especially considering the bank's strong fourth-quarter results and its continued prospects for high profitability. Bank7 reported a return on assets (ROA) of 2.6% and a return on tangible common equity (ROTCE) of 22% in the fourth quarter. Supporting this strong performance, InvestingPro analysis shows the bank achieved impressive revenue growth of 38% and maintains a "GREAT" Financial Health Score. The analyst pointed out that Bank7's current price-to-earnings ratio for 2025 estimates presents an attractive opportunity for investors due to the bank's potential for solid organic balance sheet growth, a positive credit outlook, and its ability to grow tangible book value (TBV) faster than its peers.
The analyst also highlighted Bank7's financial position, noting its well-matched balance sheet duration, as demonstrated by results in the second half of 2024, and its growing excess capital flexibility, which stood at 11.8% for tangible common equity (TCE). The increase of 53 basis points from the previous quarter suggests additional capacity for future mergers and acquisitions (M&A) activities, which are expected to be well-received by the market.
Furthermore, Race adjusted the earnings per share (EPS) estimates for Bank7 upward by 3% for 2025 and 2026, to $4.05 and $4.10, respectively. This was attributed to anticipated higher net interest income (NII) growth. The new price target of $55 is based on a multiple of 13.5 times the estimated 2025 earnings per share, which is a premium compared to the peer group average of 11.6 times, justified by Bank7's superior profitability outlook.
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