On Friday, Piper Sandler adjusted its price target for Univest Corporation of Pennsylvania (NASDAQ:UVSP), increasing it from $20.00 to $24.00 while maintaining a Neutral rating on the stock. The adjustment followed the company's release of its second-quarter 2024 earnings, which exceeded analyst and consensus estimates.
Univest Corporation reported earnings per share (EPS) of $0.62 for the second quarter. After accounting for a $171,000 Bank-Owned Life Insurance (BOLI) death benefit, the core EPS was calculated at $0.61. This figure notably surpassed the expected $0.51 EPS by both Piper Sandler and the consensus estimate.
The company's financial performance for the quarter revealed that provisioning and expenses were each $0.06 lower than Piper Sandler's predictions. However, total revenues fell slightly short by $0.02, attributed mainly to a $0.02 shortfall in Net Interest Income (NII). The Net Interest Margin (NIM) saw a contraction of 4 basis points during the quarter, which did not meet the expectation of remaining flat compared to the previous quarter.
Despite the revenue miss, the analyst viewed the quarter positively, highlighting improvements in credit and capital, as well as increases in loan and deposit balances. Additionally, Univest Corporation's strategic share repurchases contributed to a robust bottom-line result.
The firm's outlook on Univest Corporation's shares remains Neutral, even with the improved price target, reflecting the mixed results of higher earnings and lower-than-anticipated revenues.
In other recent news, Univest Financial Corporation has reported a net income of $18.2 million for the second quarter of 2024, marking a period of solid financial growth. This growth was largely driven by a significant increase in deposits and loans, with deposits growing by $90 million and loans by approximately $106 million. In addition, non-interest income saw a rise of 5.8% compared to the previous year.
Univest also repurchased nearly 191,000 shares and provided updated guidance for the year. This guidance includes steady loan growth, a slight net interest income contraction, lower provision for credit losses, and increased non-interest income growth. Despite anticipating an increase in the cost of deposits in the latter half of the year, Univest remains optimistic about its growth pipeline and future performance.
Furthermore, the company expects deposit pricing to become more competitive in the coming quarters. Univest's loan book is composed of approximately 32% purely floating rate loans, which yields slightly above 200-250 basis points attached to SOFR prime.
InvestingPro Insights
Following Piper Sandler's updated assessment of Univest Corporation of Pennsylvania (NASDAQ:UVSP), InvestingPro data and tips provide additional context for investors. With a market capitalization of $824.58M and an attractive P/E ratio of 11.59, Univest Corporation appears to be a noteworthy player in its sector. The company's P/E ratio has remained fairly stable over the last twelve months as of Q2 2024, standing at 11.48. Additionally, the firm has demonstrated a solid price performance with a 1 Month Price Total Return of 29.16% and a YTD Price Total Return of 30.47%, indicating strong recent growth.
Two key InvestingPro Tips shed light on the company's financial health and stock performance. Univest Corporation has a long-standing commitment to its shareholders, having maintained dividend payments for an impressive 46 consecutive years. This consistency is a sign of the company's financial stability and its ability to generate steady income streams. Moreover, analysts predict the company will be profitable this year, aligning with the positive earnings per share reported for Q2 2024. These insights suggest an underlying strength in Univest Corporation's business model, despite concerns over weak gross profit margins and an expected drop in net income for the year.
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