On Monday, Truist Securities adjusted its price target for First Financial Bankshares (NASDAQ:FFIN), a financial holding company, moving it down to $32 from the previous $34. The firm maintained its Hold rating on the stock. The revision follows a reevaluation of the company’s earnings per share (EPS) forecasts for the years 2024 and 2025, now set at $1.48 and $1.58 respectively, up from the prior $1.46 and down from $1.64.
The updated forecast by Truist Securities is based on a stronger than anticipated fee income, particularly from mortgage gain on sale results in the first quarter. Despite this, loan growth at First Financial Bankshares has been milder than expected, showing a 5% last quarter annualized rate. The softer loan growth was attributed to unforeseen paydowns as explained by the company's management.
Truist Securities anticipates that net interest income (NII) will rise sequentially through 2025, bolstered by loan growth that is expected to be funded by securities cash flows. The analyst notes that the balance sheet of First Financial Bankshares is relatively neutral, which is believed to support continued expansion across various interest rate scenarios.
The company’s capital levels are highlighted as a strong point, standing well above those of its peers with an 18.6% Common Equity Tier 1 (CET1) ratio. This strong capital position is seen as a positive aspect of First Financial Bankshares’ financial health.
In conclusion, Truist Securities believes that First Financial Bankshares’ stock is nearing fair valuation at its current trading level, which is 19.0 times the firm's projected 2025 EPS. The price target has been adjusted to $32, equating to 20.0 times the estimated 2025 earnings per share.
InvestingPro Insights
In light of the recent analysis by Truist Securities on First Financial Bankshares, InvestingPro data and tips provide additional context for investors considering the stock. With a market capitalization of $4.26 billion and a P/E ratio of 21.3 based on the last twelve months as of Q1 2024, First Financial Bankshares is positioned as a significant player in the financial sector. The company has demonstrated a commitment to returning value to shareholders, as evidenced by a dividend yield of 2.4% and a history of raising its dividend for 13 consecutive years, a streak that has lasted for 32 years in total.
InvestingPro Tips also highlight that analysts have revised their earnings upwards for the upcoming period, suggesting a positive outlook on the company's profitability. This aligns with the stock’s large price uptick over the last six months, which stands at an impressive 31.29%. Additionally, First Financial Bankshares has proven its profitability over the last twelve months.
For investors looking for more in-depth analysis and additional InvestingPro Tips, there are further insights available, including a total of 7 tips for First Financial Bankshares, which can be found at https://www.investing.com/pro/FFIN. To gain access to these valuable resources, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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