Keefe, Bruyette & Woods (KBW) has adjusted their price target on shares of QCR Holdings (NASDAQ:QCRH), increasing it to $82.00 from the previous $70.00 while it maintained its Outperform rating on the stock in the wake of QCR Holdings reporting a strong quarter, with operating earnings per share (EPS) of $1.62, surpassing expectations.
The company's pre-provision net revenue (PPNR) saw an over 11% quarter-over-quarter increase, driven by a combination of a better margin and robust capital markets fees, coupled with disciplined cost management that led to lower expenses, noted an analyst from KBW.
The financial institution experienced a notable acceleration in loan growth during the quarter, with balances rising by 12% from the last quarter on an annualized basis. The growth trajectory puts the year-to-date expansion on track to meet the full-year growth forecast of 8%-10%.
The analyst noted that while a higher provision for credit losses, due to both loan growth and economic forecast adjustments, slightly offset the earnings, the overall performance was strong.
QCR reported a strong financial performance for the second quarter of 2024, with a net income of $29 million, or $1.72 per diluted share, with a 3% increase in net interest income driven by higher average loan balances and an expanded margin. In addition to this, the company saw significant growth in deposits and loans, while managing to reduce non-interest expenses.
The company was planning future securitizations of low-income housing tax credit (LIHTC) loans, with an expectation of continued growth in capital markets revenue and wealth management.
Despite a slight decline in total deposits in the second quarter, the company has seen an 8% increase year-to-date. However, the company anticipates a modest loss from securitization activities in the third quarter but expects overall gains for the year.
InvestingPro Insights
Following Keefe, Bruyette & Woods' upgrade of QCR Holdings' price target, real-time data from InvestingPro further illuminates the company's financial landscape. With a market capitalization of $1.26 billion and a robust operating income margin of nearly 40% over the last twelve months as of Q2 2024, QCR Holdings demonstrates a solid financial footing. The company's price-to-earnings (P/E) ratio stands at 11.07, suggesting a potentially attractive valuation relative to earnings.
InvestingPro Tips indicate that analysts have recently revised their earnings projections upwards for QCR Holdings, signaling confidence in the company's future performance. Moreover, with a strong return over the last week, month, and three months, the stock's momentum is noteworthy. These returns, along with the fact that QCR Holdings has maintained dividend payments for 23 consecutive years, offer investors a blend of growth potential and income stability.
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