On Tuesday, WSFS Financial Corporation (NASDAQ:WSFS) saw its price target increased by Piper Sandler from $48.00 to $55.00, while the firm maintained a Neutral stance on the stock. The adjustment followed the company's second-quarter earnings report, which revealed an earnings per share (EPS) of $1.16.
After accounting for certain one-time items, including a derivative valuation adjustment, the core EPS was calculated at $1.08, surpassing both Piper Sandler's and the consensus estimate of $1.04.
The earnings beat was primarily attributed to a significant 13% quarter-over-quarter increase in operating fees, which was $0.08 higher than the approximately 5% growth that had been projected. This fee performance was driven by gains in WSFS's Cash Connect business and wealth management segments.
However, there were some counterbalancing factors, such as net interest income (NII) falling short by a penny from projections and expenses exceeding forecasts by $0.05. A lower tax rate, benefiting from solar tax credit investments, contributed an additional $0.02 to the earnings.
In the second quarter, WSFS Financial also demonstrated aggressive capital return activity, repurchasing nearly 900,000 shares. This followed a strong buyback program in the first quarter of 2024.
Despite these developments, the company's outlook for 2024 remained largely unchanged, and Piper Sandler anticipates little alteration to the earnings expectations for the current and following year based on the latest financial results.
InvestingPro Insights
Following the robust second-quarter performance of WSFS Financial Corporation, InvestingPro data provides a deeper look into the company's financial health and market position. The market capitalization stands at a solid $3.35 billion, with a price-to-earnings (P/E) ratio of 12.63, indicating that the stock may be reasonably valued relative to its earnings. Notably, the company has shown a consistent pattern of rewarding its shareholders, having raised its dividend for 10 consecutive years and maintained dividend payments for an impressive 27 consecutive years. These InvestingPro Tips highlight the company's commitment to shareholder returns, which is particularly reassuring for income-focused investors.
The recent stock performance adds to the positive outlook, with a strong return over the last month of 20.43% and an even more impressive three-month return of 32.89%. Analysts remain optimistic about the company's profitability, a sentiment underscored by three analysts revising their earnings upwards for the upcoming period. Additionally, the stock is trading near its 52-week high, currently at 96.6% of this peak, which may indicate market confidence in the firm's future prospects.
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