On Monday, Keefe, Bruyette & Woods adjusted its outlook on Bar Harbor Bankshares (NYSE:BHB), reducing the share price target to $28.00 from the previous $29.00. The firm has maintained a Market Perform rating on the shares.
This adjustment follows the company's earnings release, which reported $0.66 per share, slightly surpassing expectations by $0.02 per share. The earnings beat was attributed to lower expenses and provisions, which helped mitigate weaker spread income.
The analyst noted that Bar Harbor Bankshares experienced a modest margin decline of 3 basis points, reflecting a mix shift and ongoing pricing pressures on deposits. Despite a seasonally slower loan growth at 2% from the previous quarter, the company's net interest income (NII) was impacted by a slightly smaller earning asset base.
The firm anticipates the margin to stay relatively stable moving forward, supported by healthy loan growth pipelines, while expenses and fee income are expected to continue trending positively.
Keefe, Bruyette & Woods has adjusted its earnings estimate for 2024 downward by one cent but has left its 2025 earnings estimate unchanged. The new price target of $28 reflects the firm's revised expectations based on the recent financial performance and market conditions. The Market Perform rating suggests that the analyst sees the stock as likely to perform in line with the broader equity market.
The financial results and the subsequent price target adjustment come at a time when Bar Harbor Bankshares is navigating a mix shift and deposit pricing pressures. The firm's outlook is based on the stability of the margin and the potential for modest loan growth, coupled with favorable trends in expenses and fee income.
InvestingPro Insights
In the wake of Keefe, Bruyette & Woods' recent analysis, additional insights from InvestingPro reveal noteworthy metrics for Bar Harbor Bankshares (NYSE:BHB). With a PRONEWS24 promo code, investors can delve deeper into these metrics and discover even more InvestingPro Tips. The company's P/E Ratio (Adjusted) for the last twelve months as of Q1 2024 stands at 8.49, indicating a valuation that might be attractive to value investors. Moreover, Bar Harbor Bankshares boasts a robust Dividend Yield of 4.71% as of the latest data, which could appeal to income-focused investors, especially considering the company's history of raising its dividend for 30 consecutive years—an InvestingPro Tip that underscores its commitment to shareholder returns.
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