On Tuesday, Keefe, Bruyette & Woods, a financial services company, raised its stock price target for South State Corporation (NASDAQ:NYSE:SSB) to $95.00, up from the previous target of $92.00. The firm maintained its Outperform rating on the bank holding company's shares.
The adjustment in the stock price target is based on the raised earnings per share (EPS) estimates for the years ahead. The firm now projects an EPS of $8.50 for South State in 2025, an increase from the earlier estimate of $7.30. Moreover, there is an anticipation of the EPS reaching over $9.50 by 2026, once the cost savings from the merger with Independent Bank (NASDAQ:INDB) of Texas (IBTX) are fully realized.
The analyst expressed a positive view on the acquisition of IBTX by South State, highlighting the strong core earnings potential of the combined entity. The alignment in company cultures and the manageable risks associated with the merger were also noted as reasons for the optimistic outlook.
South State's stock is currently trading at 1.7 times tangible book value (TBV) and 9.3 times the estimated EPS for 2025. These metrics contributed to the firm's decision to continue recommending the stock as Outperform, signaling confidence in South State's financial performance and growth trajectory.
InvestingPro Insights
Following the recent analysis by Keefe, Bruyette & Woods, current InvestingPro data provides additional context to South State Corporation's financial status. With a market capitalization of $5.92 billion and a Price to Earnings (P/E) ratio of 12.59, the company presents a stable investment profile. Notably, the adjusted P/E ratio for the last twelve months as of Q1 2024 stands at 12.39, reflecting consistency in earnings valuation over time.
InvestingPro Tips highlight South State's commitment to shareholder returns, with a high shareholder yield and a track record of raising its dividend for 12 consecutive years, and maintaining dividend payments for 28 years. These factors may appeal to income-focused investors.
Still, it is worth noting that 7 analysts have revised their earnings estimates downwards for the upcoming period, which could suggest a more cautious outlook on future profitability. Despite this, the company has been profitable over the last twelve months, and analysts predict it will remain profitable this year.
For investors seeking more comprehensive analysis, InvestingPro offers additional tips on South State Corporation, which can be explored further at https://www.investing.com/pro/SSB. Moreover, for those considering an InvestingPro subscription, use coupon code PRONEWS24 to receive an additional 10% off a yearly or biyearly Pro and Pro+ subscription. There are 6 more InvestingPro Tips available that could provide deeper insights into South State's financial health and future prospects.
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