On Wednesday, Fulton Financial (NASDAQ:FULT) Corporation (NASDAQ:FULT) received a reiterated Equal Weight rating with a stable $16.00 stock price target from an analyst at Stephens. Despite outperforming the consensus earnings per share (EPS) estimate of $0.38 with reported first-quarter 2024 GAAP and operating EPS of $0.36 and $0.40, respectively, the company fell short of the forecasted $0.42 EPS.
The shortfall was attributed to lower-than-expected net interest income (NII), which was impacted by a decrease in the net interest margin (NIM) by four basis points, quarter over quarter, to 3.32%, and a smaller-than-anticipated average of earning assets.
The analyst noted that loan balances saw a modest quarter-over-quarter increase of 0.4%. However, fee income did not meet expectations, primarily due to reduced commercial swap fees and other income.
, expenses exceeded forecasts, influenced by ongoing costs associated with the FultonFirst initiative. Despite these challenges, credit quality remained robust, with net charge-offs (NCOs) to average loans at 0.16% and non-performing assets (NPAs) to assets remaining relatively steady quarter over quarter at 0.57%.
Fulton Financial's guidance for the full year 2024 remains unchanged, but the projected NII range of $790 million to $820 million is below the consensus estimate of $829 million. The analyst anticipates that, in light of the potential risks to consensus NII and EPS forecasts, Fulton Financial's shares are likely to trade at or below their peer group level in the upcoming trading session.
The company's performance reflects a mixed outcome, with a solid credit quality offset by potential concerns regarding its revenue and expense trajectories. The analysis suggests that these factors may influence the market's reception of Fulton Financial's shares in the near term.
InvestingPro Insights
Fulton Financial Corporation (NASDAQ:FULT) has demonstrated a blend of challenges and achievements recently. According to InvestingPro data, the company has a market capitalization of $2.36 billion, a modest P/E ratio of 8.93, and a price-to-book ratio that suggests the stock is trading below its book value at 0.92. These metrics indicate a company that is potentially undervalued relative to its earnings and assets.
InvestingPro Tips highlight that analysts have revised their earnings upwards for the upcoming period, signaling optimism about Fulton Financial's profitability, which is also supported by the fact that the company has been profitable over the last twelve months. Additionally, Fulton Financial has shown a commitment to shareholder returns by maintaining dividend payments for 43 consecutive years, with a current dividend yield of 4.39%.
Investors should note that while the company has seen a large price uptick of 25.54% over the last six months, it also suffers from weak gross profit margins, which could be a point of concern. Nonetheless, the company's long-standing profitability and dividend history may appeal to those looking for stable income-generating investments.
For readers interested in a deeper dive into Fulton Financial's performance and potential, there are additional InvestingPro Tips available at https://www.investing.com/pro/FULT. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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