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TriCo Bancshares stock target raised +10% on earnings outlook

EditorAhmed Abdulazez Abdulkadir
Published 2024-07-29, 09:24 a/m
TCBK
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On Monday, Piper Sandler increased its price target for TriCo Bancshares (NASDAQ:TCBK) shares from $47.00 to $53.00 while maintaining an Overweight rating. The adjustment follows an earnings forecast revision for the years 2024 and 2025. The firm now expects TriCo Bancshares to report earnings per share (EPS) of $3.36 in 2024 and $3.51 in 2025, up from its previous forecast of $3.20 and $3.22, respectively.

The revised price target of $53.00 reflects a valuation at 15.0 times the estimated 2025 earnings per share, an increase from the prior multiple of 14.5 times. This change is attributed to higher market multiples anticipated in the valuation. Piper Sandler's outlook for TriCo Bancshares is based on several positive factors, including a higher net interest margin (NIM), improved non-interest expense (NIE), and lower loan loss provisions (LLPs).

The analyst's positive stance is further supported by TriCo Bancshares' strong performance metrics. The bank is recognized for its above-average pre-provision net revenue return on assets (PPNR ROA), higher than average reserves, robust capital levels, and a low-cost core deposit base that does not rely on brokered funds. These attributes contribute to the bank's balance sheet flexibility, which is expected to allow it to outperform its peers.

TriCo Bancshares is currently trading at a premium compared to its peers, which are valued at approximately 12.5 times their earnings. This premium is justified by the bank's high-quality financial indicators and its ability to maintain a strong performance relative to other banks in the sector.

InvestingPro Insights

TriCo Bancshares (NASDAQ:TCBK) has shown a commendable commitment to shareholder value, as evidenced by its track record of raising dividends for 11 consecutive years and maintaining dividend payments for 32 years. This consistency in rewarding investors is a testament to the company's financial stability and prudent management. Additionally, the recent upward revisions in earnings estimates by analysts for the upcoming period suggest a positive outlook on the company's profitability, which aligns with Piper Sandler's increased price target and optimistic analysis.

InvestingPro Data indicates TriCo Bancshares has a market capitalization of $1580M USD and maintains a solid P/E ratio of 14.1, which is slightly below the adjusted P/E ratio for the last twelve months as of Q2 2024 at 13.93. The bank's revenue for the same period stands at $388.27M USD, with a notable operating income margin of 39.56%. Furthermore, the company's strong performance is reflected in its total price return over the last month of 20.34%, and an impressive 31.81% over the past year, trading near its 52-week high.

For investors seeking comprehensive insights and additional strategies, InvestingPro offers more tips on TriCo Bancshares. Use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, and discover the 9 additional InvestingPro Tips that can further guide investment decisions.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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