On Wednesday, Keefe, Bruyette & Woods adjusted its price target on shares of Atlantic Union Bankshares (NYSE:AUB), trading on NASDAQ:AUB, to $35.00 from the previous $36.00. The firm has decided to maintain a Market Perform rating on the stock.
The revision follows Atlantic Union Bankshares' first-quarter performance, which did not meet expectations primarily due to a 15 basis points decrease in net interest margin (NIM). The bank's recent acquisition of AMNB, completed on April 1, 2024, was also factored into the updated guidance. The analysts noted that the forward NIM and net interest income (NII) are projected to be slightly lower than their initial model, prompting an 8% reduction in their 2024 earnings per share (EPS) estimates. However, the impact on the 2025 EPS forecast is minimal, with only a 1% decrease, as it aligns more closely with the fourth-quarter 2024 run rate.
Currently, Atlantic Union Bankshares' shares are trading at a premium, with an estimated 11 times the 2024 earnings and 1.7 times the tangible book value per share (TBVPS). The analysts believe that this valuation is justified given the bank's higher profitability levels and strong credit performance. Despite the lowered price target, the Market Perform rating suggests that the firm views the stock as appropriately valued in the market, taking into account the adjusted earnings expectations.
InvestingPro Insights
Atlantic Union Bankshares (NASDAQ:AUB) has demonstrated commitment to shareholder returns, as evidenced by their consistent history of dividend payments. InvestingPro Tips highlight the company's high shareholder yield and the fact that it has raised its dividend for 13 consecutive years, indicating a reliable income stream for investors. Additionally, the company's ability to maintain dividend payments for over three decades underscores its financial stability in the eyes of many market participants.
Real-time data from InvestingPro shows a Price/Earnings (P/E) Ratio of 12.89, suggesting that the company's shares might be trading at a reasonable value relative to its earnings. Moreover, with a Price/Book (P/B) Ratio of just under 1, at 0.96, the stock could be attractive to value investors seeking assets that are priced close to their net asset value. The Dividend Yield stands at a noteworthy 3.89%, further solidifying Atlantic Union Bankshares as a potentially appealing choice for income-focused portfolios.
While the bank faces challenges, as indicated by a slight revenue decline in the last twelve months, the company remains profitable, which could reassure investors looking for stable earnings. For those interested in a deeper dive into Atlantic Union Bankshares' financial health, InvestingPro offers additional insights and metrics. To access these, consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. Readers can find out how many more InvestingPro Tips are available by visiting the Atlantic Union Bankshares page on InvestingPro.
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