On Monday, Keefe, Bruyette & Woods, a financial services specialist firm, adjusted its outlook on First BanCorp, the holding company for FirstBank Puerto Rico. The firm increased the stock price target for First BanCorp (NYSE:FBP) to $21.00, up from the previous target of $19.00. The Outperform rating on the bank's shares has been sustained, signaling continued confidence in its financial prospects.
First BanCorp has demonstrated a robust start to the year, with a year-to-date gain of 5%, significantly outperforming the KRX bank index by approximately 1600 basis points. The bank's shares have been noted for their exceptional performance, having been the top performer in the KRX last year. This trend appears to be continuing into 2024.
The firm's analyst cited several factors underpinning their positive stance on First BanCorp. These include an inflection in net interest income (NII) and a proactive approach to capital return, with the bank returning 100% of earnings to shareholders. According to the analyst, these strategic moves position First BanCorp as one of the most compelling narratives in the banking sector.
Furthermore, the analyst highlighted First BanCorp's leading profitability, forecasting a return on tangible common equity (ROTCE) of 16% in 2025. Despite the bank's strong performance and profitability, its shares are still trading at a modest discount compared to its peers. This valuation gap is seen as offering an attractive entry point for investors.
The revised stock price target reflects an increase in estimates by Keefe, Bruyette & Woods, based on First BanCorp's financial performance and market positioning. The firm's outlook suggests that the bank is well-positioned to maintain its growth trajectory and continue delivering value to its shareholders.
InvestingPro Insights
As Keefe, Bruyette & Woods raise their price target for First BanCorp, real-time data from InvestingPro supports a strong financial outlook for the company. With a market capitalization of $2.89 billion and a price-to-earnings (P/E) ratio of 9.84, which adjusts to an even more attractive 9.6 when looking at the last twelve months as of Q1 2024, First BanCorp appears to be trading at a low P/E ratio relative to near-term earnings growth.
This is further corroborated by a PEG Ratio of 0.77 during the same period, suggesting that the stock may be undervalued relative to its earnings growth.
Investors may also be interested in the company's consistent performance in shareholder returns. An InvestingPro Tip highlights that First BanCorp has raised its dividend for 6 consecutive years, with a notable dividend growth of 14.29% in the last twelve months as of Q1 2024. The dividend yield stands at 3.62%, rewarding investors with a steady income stream.
Moreover, the company has seen a high return over the last year, with a 65.46% price total return, and is trading near its 52-week high at 97.63% of the peak price. These metrics underscore First BanCorp's commitment to returning value to shareholders and its strong market performance.
For those looking for further insights, there are additional InvestingPro Tips available that delve deeper into First BanCorp's financial health and future prospects. Remember, using the coupon code PRONEWS24 will get you an additional 10% off a yearly or biyearly Pro and Pro+ subscription, offering even more expert tips and analysis to guide your investment decisions. Currently, there are 11 more InvestingPro Tips listed for First BanCorp, which can be found at https://www.investing.com/pro/FBP.
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