On Thursday, Piper Sandler adjusted its outlook for United Community Banks (NASDAQ:UCBI), lowering the stock price target from $30.00 to $28.00 while keeping a Neutral rating on the stock. The revision reflects a recalibration of earnings estimates for the years 2024 and 2025, with expectations now set at $2.00 and $2.30 per share, down from the previous $2.24 and $2.43, respectively.
This change is primarily due to a projected decline in net interest income (NII) and slightly increased expenses than initially forecasted.
The bank is actively working to reduce higher-cost deposit accounts and is seeking cost-saving measures throughout its operations. These efforts are anticipated to improve profitability, potentially exceeding a 1% return on assets (ROA). Still, analysts at Piper Sandler believe this milestone is more likely to be achieved in 2025.
The new stock price target of $28.00 is based on approximately 12 times the estimated earnings for 2025, a slight decrease from the previous multiple of 12.5. The adjustment takes into account the expected lower profitability and a marginally smaller balance sheet than initially projected.
United Community Banks has not publicly responded to the revised price target and maintained rating at the time of this report. The bank's shares will continue to be monitored by investors as they assess the impact of the revised earnings estimates and price target on the stock's performance.
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