Piper Sandler has increased HarborOne Bancorp's (NASDAQ: NASDAQ:HONE) price target to $14.00 from $11.50 while reiterating its Neutral stance on the back of a solid performance of the company in the recent quarter and the improvement in asset quality.
"While we thought the quarter was solid and asset quality improved, we believe that mortgage banking headwinds industrywide may persist a little while longer," said an analyst from Piper Sandler.
"Following the recent rally in community bank stocks, we also believe the stockis only modestly undervalued, the analyst said, adding, "With a longer-term outlook, we like what the company is building and view their franchise as quite attractive. We think core profitability will also move higher when the Fed finally reduces rates."
The decision to raise the price target comes during the rally in community bank stocks, which have seen modest undervaluation. HarborOne Bancorp's stock has experienced a year-to-date increase of approximately 13% and is trading at around 117% of its price-to-tangible book value (P/TBV).
Piper Sandler has a positive long-term outlook on HarborOne Bancorp, commending the company's franchise and its potential attractiveness. The firm also anticipates an increase in core profitability for the company once the Federal Reserve decides to lower interest rates.
InvestingPro Insights
As HarborOne Bancorp (NASDAQ: HONE) continues to capture the market's attention with its robust performance and share repurchase program, insights from InvestingPro provide a deeper understanding of the company's financial health and market position. With a market capitalization of $566.76 million USD and a Price/Earnings (P/E) ratio standing at 34.86, the company reflects a strong valuation compared to its earnings. However, a closer look at the adjusted P/E ratio for the last twelve months as of Q2 2024 shows a more accessible figure of 23.75, suggesting a potentially more attractive investment on an earnings basis.
InvestingPro Tips highlight that HarborOne Bancorp has delivered a significant return over the last week, with a 7.7% price total return, and an even more impressive 30.82% return over the last month. This performance is consistent with the strong rally noted by Piper Sandler and could be indicative of investor confidence in the company's strategic initiatives, including the share repurchase program.
While the company's stock trades near its 52-week high, at 98.69% of this peak, it is important to note that analysts predict the company will be profitable this year, as reflected by the company's basic and diluted EPS (Continuing Operations) of $0.38 USD. Moreover, HarborOne Bancorp has demonstrated a commitment to shareholder returns with a dividend yield of 2.36% and a 6.67% dividend growth as of the last twelve months ending Q2 2024.
For investors seeking additional insight, there are more InvestingPro Tips available that could help inform investment decisions. By using the coupon code PRONEWS24, readers can get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, unlocking access to a wealth of financial analysis and expert views. As of now, there are 11 additional InvestingPro Tips listed for HarborOne Bancorp that could provide further guidance on the stock's potential trajectory.
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