Piper Sandler has adjusted its price target on shares of HBT Financial (NASDAQ: NASDAQ:HBT), bringing it down to $24 from the previous $25, while keeping a Neutral rating on the stock.
The adjustment followed the company's third-quarter results, which showcased stronger revenue driven by an unexpected expansion in Net Interest Margin (NIM) and an increase in core fee income. The solid credit quality of HBT Financial was noted as a consistent factor, with expectations for it to continue being a non-issue.
The financial analyst acknowledged the short-term challenges posed by the current interest rate environment, which could affect the net interest income (NII) and NIM in the near to intermediate term.
Despite these headwinds, the analyst views HBT Financial as a long-term, defensive investment due to its strong profitability profile and credit quality across various economic cycles. The company's growing excess capital also presents opportunities for mergers and acquisitions that could enhance future earnings per share (EPS).
Looking ahead, Piper Sandler increased its fourth-quarter 2024 earnings estimate for HBT Financial to $0.58, a $0.02 rise from the previous estimate, citing higher core fee income expectations.
However, the 2025 earnings per share estimate remains unchanged at $2.10. Additionally, the firm introduced its 2026 earnings estimate of $2.15 for the company.
In other recent news, HBT Financial has been the focus of numerous analyst upgrades and adjustments. BofA has given a Buy rating to SLM (NASDAQ:SLM) Corp., citing its potential for capital return. HBT Financial, meanwhile, has announced a quarterly cash dividend of $0.19 per share, maintaining its tradition of providing returns to shareholders.
The bank's recent financial performance has been recognized by several analyst firms, including Piper Sandler, Raymond James, and Keefe, Bruyette & Woods, which have raised their price targets for HBT Financial shares. These adjustments reflect the bank's strong second-quarter performance and its potential to cushion future Net Interest Margin (NIM) compression.
DA Davidson has also adjusted their outlook on HBT Financial, increasing the price target to $26 from the previous $22, following the company's robust second-quarter performance. The firm has highlighted HBT Financial's interest in strategic mergers and acquisitions and effective expense management.
In recent developments, HBT Financial's stock target has been raised by Keefe, Bruyette & Woods, reaffirming an Outperform rating on the company's shares. This followed HBT Financial's recent earnings report, which revealed a performance slightly above market expectations.
InvestingPro Insights
Recent data from InvestingPro provides additional context to Piper Sandler's analysis of HBT Financial (NASDAQ: HBT). The company's P/E ratio of 10.36 aligns with the analyst's view of HBT as a value proposition, trading at a low multiple relative to its near-term earnings growth potential. This is further supported by a PEG ratio of 0.79, suggesting the stock might be undervalued considering its growth prospects.
HBT's dividend yield of 3.54% and a notable dividend growth of 11.76% over the last twelve months could appeal to income-focused investors, potentially offsetting some of the short-term challenges highlighted in the article. The company's profitability, as mentioned by Piper Sandler, is reflected in its strong operating income margin of 48.47% for the last twelve months.
InvestingPro Tips indicate that while HBT is expected to remain profitable this year, it faces challenges with weak gross profit margins. This aligns with the analyst's cautious stance and the reduced price target. Investors considering HBT should note that InvestingPro offers 5 additional tips for a more comprehensive analysis of the company's prospects.
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