On Wednesday, Piper Sandler, a financial services firm, adjusted its outlook for South State Corporation (NASDAQ:NYSE:SSB) shares, a bank holding company, by increasing the price target from $95.00 to $98.00. The firm has maintained an Overweight rating on the stock, indicating a positive future performance expectation.
The revision in the price target comes with an updated earnings per share (EPS) estimate for the year 2025, which has been raised to $7.50 from the previous estimate of $7.30.
Additionally, Piper Sandler has initiated an EPS estimate for 2026 at $8.80. These projections suggest a robust return on assets (ROA) of approximately 1.33%, a return on equity (ROE) of 10.25%, and a return on tangible common equity (ROTCE) of 15.35%.
The new price target of $98 is based on approximately 12.5 times the firm's estimated 2026 earnings per share, discounted back one year at a rate of 12%.
The financial analysis does not factor in any potential interest rate cuts for 2026, although it notes that South State's balance sheet has become more sensitive to liabilities following its combination with IBTX. This sensitivity could provide additional upside beyond the current projections if rate cuts occur.
Piper Sandler's forecast is described as conservative, with the potential for South State to surpass expectations through quicker-than-anticipated growth, estimated at 5% to 7%, reduced expenses, or an improved net interest margin (NIM).
The firm concludes that South State is well-positioned to exceed in various interest rate scenarios, whether they remain high or decrease.
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