On Thursday, Piper Sandler maintained its Neutral rating on Bank First National Corp. (NASDAQ: NASDAQ:BFC) stock, adjusting the price target to $104 from $99.
The firm's analyst highlighted the bank's strong performance in the third quarter, which included a 4% pre-provision net revenue (PPNR) beat, core net interest margin (NIM) expansion, and steady mid-single-digit loan growth. The bank's credit quality remained stable.
The analyst projected that Bank First National Corp. will sustain above-average profitability, with returns on assets (ROA) and returns on tangible common equity (ROTCE) at 1.6% and 15.6%, respectively, during the third quarter. The continued core NIM expansion is expected to contribute to further positive operating leverage.
Bank First National Corp. is anticipated to enhance its profitability and earnings per share (EPS) growth through potential mergers and acquisitions (M&A), leveraging its premium currency, increased capital flexibility, and management's proactive strategy in engaging with potential partners.
The financial institution's valuation currently stands at 2.2 times tangible book value (TBV) and 15.0 times the firm's estimated 2025 earnings. Despite the premium valuation, the analyst raised the 2024 and 2025 operating EPS forecasts by 4% and 8% to $6.35 and $6.70, respectively, and introduced a 2026 estimate of $7.15.
The revised price target of $104 reflects a 15.5 times multiple on the firm's estimated 2025 earnings, which is a slight reduction from peer multiples. The analyst justified the premium valuation relative to peers by citing Bank First National Corp.'s various superiorities.
In other recent news, Bank First Corporation released its quarterly shareholder newsletter, providing updates on the company's operations and performance. The Wisconsin-based financial institution has been the subject of several analyst notes, with Piper Sandler notably adjusting its stock price target for the company.
Following the release of Bank First's strong Q2 results, Piper Sandler increased the target to $99 from the previous $84, while maintaining a neutral rating on the shares. The firm also raised its operating earnings per share estimates for Bank First for 2024 and 2025 by 3%, setting them at $6.10 and $6.20 respectively.
However, it's important to note that Bank First's stock target was previously lowered by Piper Sandler from $90 to $87 due to a mixed Q1 performance. Despite a 12% shortfall in pre-provision net revenue, the financial institution's earnings per share for the quarter exceeded expectations, supported by a tax benefit and substantial share buybacks.
Piper Sandler maintained its neutral rating due to Bank First's premium valuation and positive prospects for future acquisitions. These are the recent developments surrounding Bank First.
InvestingPro Insights
Bank First National Corp.'s (NASDAQ: BFC) strong performance, as highlighted by Piper Sandler, is further supported by real-time data from InvestingPro. The company's P/E ratio of 11.19 suggests it's trading at an attractive valuation relative to its earnings, aligning with the analyst's positive outlook. This is reinforced by an InvestingPro Tip indicating that BFC is trading at a low P/E ratio relative to its near-term earnings growth.
The bank's profitability, emphasized in the analyst's report, is confirmed by InvestingPro data showing a robust operating income margin of 60.63% for the last twelve months as of Q3 2024. Additionally, the company's revenue growth of 26.37% over the same period underscores its strong financial performance.
An interesting InvestingPro Tip reveals that BFC has maintained dividend payments for 15 consecutive years, which may appeal to income-focused investors. This consistent dividend history, coupled with a current dividend yield of 1.7%, adds another dimension to the bank's investment profile not mentioned in the original analysis.
For investors seeking more comprehensive insights, InvestingPro offers 8 additional tips for Bank First National Corp., providing a deeper understanding of the company's financial health and market position.
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