On Thursday, Piper Sandler showed confidence in Veritex Holdings (NASDAQ:VBTX) by increasing the price target on the stock to $26 from $25, while keeping an Overweight rating. The adjustment follows a period where Veritex shares recovered, aligning with the broader market after initially trading lower.
Veritex Holdings, which has been actively de-risking its balance sheet, has seen its credit metrics stabilize. The bank's asset-sensitive balance sheet is expected to benefit from a reduced likelihood of interest rate cuts. These factors contribute to the firm's positive outlook on the stock.
The financial institution's earnings estimates for 2024 remain unchanged, but projections for 2025 have been revised upwards by 7%. This increase is attributed to the removal of several anticipated rate cuts and heightened expectations for loan growth. Despite the raise in the price target, Piper Sandler’s valuation still suggests that Veritex shares are trading at approximately 1.15 times tangible book value per share (TBVPS).
The new $26 price target set by Piper Sandler is based on approximately 11.5 times the firm's expected earnings for 2025. This valuation is indicative of the analyst’s view that the stock has potential for growth, supported by the company's financial strategies and market conditions.
Investors may take note of this updated price target as they assess Veritex Holdings' performance in the market and its alignment with the financial sector's current dynamics. The bank's efforts to improve its balance sheet and the positive changes in its earnings expectations are key points of consideration for stakeholders.
InvestingPro Insights
Following the recent positive adjustment by Piper Sandler, Veritex Holdings (NASDAQ:VBTX) continues to show noteworthy market activity and financial metrics. According to InvestingPro data, Veritex Holdings has a market cap of $1.12 billion and trades with a P/E ratio of 12.09, which adjusts slightly to 11.95 when considering the last twelve months as of Q1 2024. This valuation is in line with Piper Sandler's price target based on earnings expectations.
InvestingPro Tips indicate that while analysts have revised their earnings downwards for the upcoming period, the company has experienced a significant return over the last week with a 7.61% price total return, and a large price uptick over the last six months at 25.7%. These movements reflect the bank's operational performance and market sentiment. Moreover, analysts predict that Veritex will be profitable this year, a projection already realized over the past twelve months.
Investors looking for additional insights can find more InvestingPro Tips for Veritex Holdings, which could further inform their investment decisions. For those interested in a deeper analysis, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. Discover numerous other tips and a comprehensive suite of tools on the InvestingPro platform to enhance your investment strategy.
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