On Thursday, Keefe, Bruyette & Woods adjusted its stock price target for RBB Bancorp (NASDAQ: RBB), increasing it to $22 from the previous $20, while maintaining a Market Perform rating. The firm acknowledged the progress RBB Bancorp has made in resolving legacy issues, which has bolstered the company's stock performance this year.
RBB Bancorp's shares are currently trading at a highly discounted 0.8 times tangible book value (TBV), reflecting the company's lower profitability levels. This situation is primarily due to the impact of a higher rate environment on the bank's margins. Despite a further compression in net interest margin (NIM) of 4 basis points on a linked-quarter basis, the firm expressed optimism that the pressure on margins appears to be easing.
The firm noted that improvements may require further cuts to see a more rapid enhancement in performance. Nevertheless, the firm's analysts have modestly raised their estimates for RBB Bancorp alongside the price target, reiterating their Market Perform rating.
The updated stock price target of $22 represents an increase from the previous target of $20, reflecting a more positive outlook on RBB Bancorp's ability to address its legacy issues and improve its financial metrics. This adjustment is based on the firm's analysis of the company's recent performance and future potential in the current economic climate.
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