On Friday, Piper Sandler analyst Stephen Scouten adjusted the price target for Origin Bancorp (NYSE:OBK) shares, raising it from $35.00 to $42.00, while maintaining a Neutral rating on the stock. According to InvestingPro data, this target aligns with the broader analyst consensus, as two analysts have recently revised their earnings expectations upward. The stock has demonstrated strong momentum, posting an 11.3% gain year-to-date. Scouten's decision follows a thorough review of Origin Bancorp's strategic plan, dubbed "Optimize Origin," which he believes will significantly elevate the company's earnings estimates for the coming years.
The "Optimize Origin" plan, as outlined by the Origin Bancorp team, includes measures aimed at cost savings, an improved net interest margin (NIM) trajectory, and the pursuit of growth that exceeds that of their peers. With a solid financial health score of "GOOD" from InvestingPro, the bank appears well-positioned to execute its strategy. Scouten's updated earnings estimates for 2025 and 2026 are now set at $3.00 and $3.50 per share, up from the previous $2.40 and $3.00, respectively.
The analyst expressed a positive impression from Origin Bancorp's fourth-quarter 2024 call and presentation, noting the company's thorough analysis of its business operations and the identification of several viable avenues to achieve, and potentially surpass, peer profitability levels. The stock's year-to-date performance has outpaced the KRE, with a notable 5%+ gain on the day of the announcement, demonstrating the market's quick response to the strategic plan's potential.
Despite the optimism surrounding these initiatives, Piper Sandler maintains a Neutral stance on Origin Bancorp shares for the time being, awaiting the tangible impact of these plans on the company's bottom line. Trading at a price-to-book ratio of 1.01 and offering a 1.62% dividend yield, the stock appears fairly valued according to InvestingPro's Fair Value model. The new price target of $42.00 is based on approximately 12 times the firm's 2026 earnings estimate and reflects expectations of Origin Bancorp improving from its current 0.79% ROA to become a 1%+ return on assets bank in the medium term. For deeper insights into Origin Bancorp's valuation and growth potential, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.
In other recent news, Origin Bancorp has been the center of attention with several financial firms adjusting their outlook on the company. Stephens has increased its price target on Origin Bancorp to $45, maintaining an Overweight rating. This follows the company's fourth-quarter 2024 performance, which exceeded expectations with a significant earnings per share beat of $2.46.
The company's positive results were attributed to a higher-than-expected net interest income and reduced loan loss provision expenses. Origin Bancorp has also unveiled a detailed optimization plan to restore its profitability to match its peers.
In addition, Raymond (NSE:RYMD) James has upgraded Origin Bancorp shares from Outperform to Strong Buy, raising the price target to $44. The firm anticipates a positive turnaround in the company's performance in the upcoming fourth-quarter earnings. DA Davidson and Stephens have both revised their stock price targets for Origin Bancorp to $38, citing the company's significant presence in the Texas market, deposit growth, effective cost management, and core loan yield growth as positive factors.
Keefe, Bruyette & Woods reiterated an Outperform rating, highlighting the bank's potential for improved profitability, with an expectation of a plan to enhance profitability in its fourth-quarter earnings for 2024. Cecil Jones, a seasoned financial professional, has been appointed to Origin Bancorp's Board of Directors, further enhancing its financial reporting and regulatory compliance capabilities. These developments underscore Origin Bancorp's ongoing efforts to optimize its financial performance.
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