On Thursday, Oportun Financial Corp (NASDAQ:OPRT) had its price target reduced by Keefe, Bruyette & Woods to $4.00 from the previous $4.50 for its shares. Despite the cut, the firm maintained a Market Perform rating on the stock.
The adjustment follows the company's fourth-quarter earnings report, which prompted the analyst firm to revise its earnings estimates for the years 2024 and 2025. The new estimates for Oportun Financial's earnings per share are now set at $0.20 for 2024, a significant decrease from the previous forecast of $1.50, and $1.50 for 2025, adjusted down from $2.00.
The revised price target of $4.00 is based on a price-to-earnings multiple of approximately 3 times the firm's 2025 earnings estimate. This multiple is used to gauge the stock's relative valuation and potential investment return.
The analyst's commentary highlighted weaker loan growth as the primary reason for the lowered earnings projections. This factor has influenced the firm's decision to adjust its expectations for Oportun Financial's financial performance in the coming years.
In maintaining the Market Perform rating, Keefe, Bruyette & Woods signals that Oportun Financial's stock is expected to perform in line with the broader equity market, according to their analysis. This suggests a neutral outlook on the company's shares in the near to medium term.
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