On Thursday, DA Davidson adjusted its price target for First Busey (NASDAQ:BUSE) Corporation (NASDAQ:BUSE), a financial services holding company, decreasing it to $24 from the previous target of $25. The firm has chosen to maintain a Neutral rating on the stock.
The revision comes as DA Davidson recalibrates its earnings per share (EPS) estimates for the years 2024 and 2025. The estimates have been revised downwards from $2.05 and $2.45 to $2.00 and $2.40, respectively. This decision reflects anticipated changes in the company's financial outlook, including a lowered net interest income (NII) forecast and an increase in credit costs.
The new price target of $24 is based on a multiple of 10.0 times the firm's 2025 EPS estimate and is also 1.4 times the current tangible book value (TBV) of the company. The adjustment in the price target indicates a more conservative valuation by DA Davidson in light of the revised earnings expectations.
DA Davidson's report included specific reasons for the adjustment, citing a "reduced NII outlook and increased credit costs" as the primary factors influencing the new estimates and price target.
The firm's neutral stance remains unchanged despite the updated financial projections, suggesting that the analyst sees neither significant upside nor downside potential for First Busey's stock at the current level. This rating and price target provide investors with an updated perspective on the stock's expected performance, based on the latest analysis of the company's earnings potential and market conditions.
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