Fulton Financial expands through acquisition of FRBK, DA Davidson increases holdings of PT shares

On Tuesday, DA Davidson adjusted its outlook Fulton Financial (NASDAQ: ), raised its price target to $18 from $15 previously while maintaining a neutral rating on the stock. The firm's analysis highlights Fulton Financial's significant expansion in Philadelphia through the FDIC-backed acquisition of FRBK. The move was well received by the market, with Fulton Financial shares rising 8%.

The transaction is expected to be a substantial 20% accretive to earnings per share (EPS) and provide tangible book value (TBV) dilution of less than 4%, which is significantly lower for an FDIC-assisted transaction. In addition, the deal is expected to have a quick payback period of 1.25 years. DA Davidson raised its 2025 earnings forecast by 17% despite some concerns about trading-related disruptions and an initially higher expense run rate impacting core 2024 earnings expectations.

DA Davidson said Fulton Financial's loan-to-deposit ratio (L/D) has improved from 99% to 92% and the company is likely to benefit from loan growth and net interest margin (NIM) due to reduced funding pressures improvement. However, analysts note that current stock valuations already reflect returns comparable to those of peers.

DA Davidson reiterated his neutral stance on Fulton Financial as the revised price target reflects potential upside of 7%. The firm's analysis shows that while recent acquisitions have created a positive outlook for the bank, current market prices are considered to be fully representative of expected performance.

Investment Professional Insights

Based on DA Davidson's recent analysis of Fulton Financial, it's worth considering additional insights from InvestingPro. Fulton Financial has shown a high shareholder return, which may be a sign of its commitment to returning value to investors. Additionally, the company has been trading near its 52-week high, reflecting investor confidence and strong market influence. This is consistent with the positive outlook following Fulton's acquisition of FRBK and the subsequent increase in share price.

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The price-to-earnings ratio for the trailing 12 months to the first quarter of 2024 was 10.29, and the adjusted price-to-earnings ratio was 11.23, according to InvestingPro data. Additionally, with a 4.05% dividend yield and a 43-year history of maintaining dividend payments, Fulton Financial may appeal to income-focused investors.

For those looking to delve deeper into Fulton Financial's outlook, InvestingPro provides additional tips, including analyst analysis of earnings revisions and the company's earnings forecasts for the current year.To get these insights and more, visit https://www.investing.com/pro/FULT and remember to use the coupon code PRONEWS24 Annual or biennial Pro and Pro+ subscriptions receive an additional 10% discount. There are also 6 InvestingPro Tips that can provide further guidance on Fulton Financial's performance.

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