Guaranty Bancshares Inc (GNTY) Price Target Raised to $36 by Stephens After Strong Q2 Results
In a recent update, Stephens increased the price target for Guaranty Bancshares Inc (GNTY) to $36, up from $34, while maintaining an Overweight rating. The adjustment comes after the company's second-quarter financial results exceeded expectations, driven by factors such as net interest margin (NIM) expansion, lower loan balances, and a negative loan loss provision expense.
The bank's NIM has shown consistent growth for the third consecutive quarter, with expectations for this trend to continue into 2024 and 2025, aligning with the long-term average NIM of approximately 3.50%. Despite pressure on the balance sheet in the latter half of 2024, growth is anticipated to resume in 2025.
Following these positive outcomes, Stephens has raised its earnings per share (EPS) forecast for 2024, while maintaining the projection for 2025. The new price target of $36 reflects a multiple of 1.4 times the 12-month trailing book value per share (TBVPS) forecast and 15 times the expected EPS for 2025, indicating a favorable investment opportunity.
In other news, Guaranty Bancshares introduced an Executive Officer Long Term Incentive Compensation Plan, approved by the board, to provide annual bonus opportunities based on performance metrics. Additionally, Piper Sandler adjusted its outlook on the company, lowering the price target to $30 due to changes in earnings estimates.
Guaranty Bancshares reported slight decreases in total assets and liabilities but saw increases in net interest margin and non-interest income in Q1, resulting in a net income of $6.7 million. The bank is also exploring mergers and acquisitions to enhance its long-term net interest margin target.
InvestingPro Insights:
InvestingPro data highlights Guaranty Bancshares' commitment to shareholder returns, with a dividend raised for 7 consecutive years. Recent performance includes a 13.75% increase over the last month and a 16.82% three-month price total return, showcasing resilience and growth potential.
Financial metrics reveal a P/E ratio of 12.1, adjusting to 13.94 over the last twelve months, indicating a reasonable valuation relative to earnings. The stable price to book ratio of 1.19 reinforces the company's financial standing, despite an 8.83% revenue decrease over the past twelve months.
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In conclusion, Guaranty Bancshares' strong financial performance, strategic decisions, and growth prospects make it an attractive investment opportunity for shareholders looking for long-term value and potential returns.