Piper Sandler maintained its Overweight rating on Amalgamated Bank (NASDAQ:AMAL) with a steady price target of $36.00. The firm's confidence in the bank was bolstered following investor meetings held earlier in the week in Boston, where senior executives from Amalgamated Financial Corp provided insights into the company's operations and prospects.
Senior Executive Vice President and CFO Jason Darby, along with Senior Executive Vice President and Chief Banking Officer Sam Brown, represented Amalgamated Bank at these meetings. The discussions revolved around the bank's significant political deposit business, which is expected to see increased activity due to the upcoming Presidential election.
The feedback from the meetings left Piper Sandler with a positive outlook on the bank's stock. The firm believes that Amalgamated Bank has multiple strategies at its disposal to enhance its performance in the financial market.
The maintained Overweight rating signifies Piper Sandler's expectation that Amalgamated Bank's shares will outperform the average total return of the stocks covered by the analyst over the next 12 to 18 months. The $36.00 price target suggests a level of confidence in the bank's ability to reach this valuation.
Amalgamated Bank's focus on its political deposit business, especially in light of the forthcoming Presidential election, was a key topic of interest during the investor meetings. Piper Sandler's report reflects optimism about the bank's potential to capitalize on this unique aspect of its operations.
In other recent news, Amalgamated Bank has been the subject of considerable attention due to its robust financial performance. The bank's earnings have surpassed expectations by $0.13 per share in the second quarter, bolstered by substantial political deposit growth of over 20% quarter-over-quarter. This strong performance led Keefe, Bruyette & Woods to increase their price target for the bank's shares from $30.00 to $35.00, maintaining an Outperform rating.
The bank reported significant deposit growth in the second quarter, with deposits increasing by over $759 million, primarily from political, union, and non-profit customer segments. This growth, coupled with an improved Tier One leverage ratio and an increase in net loans receivable, have contributed to the bank's optimistic outlook for the remainder of the year and into 2025.
Analysts from Keefe noted the bank's strategy of moving excess deposits off the balance sheet ahead of the fourth quarter, which is expected to reduce volatility in both margin and earnings leading into 2025. This move, along with a favorable net interest income outlook, has prompted an upward revision of earnings per share estimates by 6% for both 2024 and 2025.
InvestingPro Insights
Amalgamated Bank's (NASDAQ:AMAL) strong performance and growth potential, as highlighted by Piper Sandler, are further supported by recent financial data and insights from InvestingPro. The bank's stock has shown impressive returns, with a 82.43% price total return over the past year and a 31.23% return in the last six months, aligning with the positive outlook from the investor meetings.
InvestingPro data reveals that Amalgamated Bank is trading at a P/E ratio of 9.62, which is relatively low compared to its growth prospects. This is reinforced by an InvestingPro Tip suggesting that the bank is "trading at a low P/E ratio relative to near-term earnings growth." Additionally, the bank's revenue growth of 8.84% over the last twelve months and 12.39% in the most recent quarter indicates steady expansion, potentially driven by its political deposit business.
Another InvestingPro Tip notes that Amalgamated Bank has been "profitable over the last twelve months," with a strong operating income margin of 49.44%. This profitability, combined with the bank's growth trajectory, supports Piper Sandler's Overweight rating and $36.00 price target.
For investors seeking a deeper understanding of Amalgamated Bank's potential, InvestingPro offers 7 additional tips, providing a comprehensive analysis of the company's financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.