On Monday, First Citizens BancShares (NASDAQ:FCNCA) saw its price target increased by DA Davidson to $1,650, up from the previous target of $1,600. The firm has maintained a Neutral stance on the stock.
The company experienced significant growth in 2023, following the acquisition and integration of SIVB, building on the momentum from its 2022 CIT acquisition. This expansion has been reflected in the stock's performance, with First Citizens BancShares shares rising 87% against the KRX index last year and gaining 24% year-to-date (YTD).
DA Davidson acknowledges the transformative year for First Citizens BancShares, attributing the stock's impressive surge to the successful integration of its recent acquisitions. The firm anticipates that the steady incorporation of SIVB will contribute to loan growth that surpasses that of peers, as well as strong potential for both fee and deposit growth in the long term, coupled with excellent returns.
Despite the positive outlook on growth and integration, DA Davidson expresses concerns over potential challenges ahead. These include the risks associated with net interest margin (NIM) compression due to possible rate cuts, increased credit costs, and the potential for the market's expectations for capital returns to be unmet.
These factors have led to a revision of earnings per share (EPS) predictions, which have been lowered mainly due to the anticipation of higher credit costs and reduced expectations for stock buybacks.
With the new price target of $1,650 representing a modest increase from the prior target, DA Davidson suggests that there is limited room for further upside. This assessment has resulted in the continuation of a Neutral rating for First Citizens BancShares shares, as the firm resumes coverage with a cautious outlook on the stock's near-term potential.
InvestingPro Insights
In light of DA Davidson's recent price target increase for First Citizens BancShares, it's worth noting that the company has demonstrated a strong track record of growth and shareholder returns. According to InvestingPro data, First Citizens BancShares has a market capitalization of $22.6 billion and an attractive P/E ratio of 5.97, indicating that the stock could be undervalued relative to its earnings. The company has also experienced a remarkable revenue growth rate of 90.15% over the last twelve months as of Q4 2023.
Adding to the company's financial health, two InvestingPro Tips highlight that analysts have revised their earnings upwards for the upcoming period and that the company has maintained dividend payments for an impressive 39 consecutive years. These factors underscore the company's consistent performance and potential for continued growth. Moreover, the company has raised its dividend for 7 consecutive years, signaling a commitment to rewarding its shareholders.
Investors seeking additional insights can discover more InvestingPro Tips by visiting https://www.investing.com/pro/FCNCA. These tips can provide further context on the company's financials and market position. For those interested in a deeper analysis, using the coupon code PRONEWS24 will grant an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking a wealth of expert financial advice and market insights.
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