On Monday, Piper Sandler confirmed its positive stance on Veritex Holdings (NASDAQ:), maintaining an Overweight rating with a price target of $30.00. The affirmation follows recent investor meetings with Veritex’s CEO Malcolm Holland, CFO Terry Earley, and Director of Strategic Development Will Holford, which took place in Boston, Baltimore, and Washington, D.C. last week.
The meetings left Piper Sandler with a strong conviction in the potential for Veritex shares to rise, as the bank’s performance continues to exceed expectations. Analysts were particularly impressed by the bank’s direction, noting significant strides in improving credit trends, reducing commercial real estate concentrations, enhancing the deposit mix, and cutting deposit costs to enhance returns.
Veritex’s strategy was described as straightforward in the near term, focusing on continued progress in key operational areas. The bank’s efforts are expected to drive better returns, which reinforces the investment firm’s confidence in the stock.
Looking ahead, 2025 is anticipated to be a transitional year for Veritex’s balance sheet. However, Piper Sandler believes the bank is well-positioned for a return to growth and increased profitability in 2026 and the years that follow. Additionally, the potential for mergers and acquisitions was highlighted as a factor that could provide further upside for Veritex.
In other recent news, Veritex Holdings has reported a robust third quarter in 2024, with operating earnings reaching $32.2 million and pretax pre-provision earnings of $44.6 million.
Despite a decrease in total loans, the firm has noted growth in revenue and an improved net interest margin. Piper Sandler and DA Davidson, following these results, increased their price targets for Veritex to $30 and $33 respectively, maintaining positive ratings and highlighting the company’s strong core deposit franchise and stable net interest margin.
The analysts also noted positive developments such as improved credit trends, a reduction in commercial real estate and risk-based capital ratio, and an increase in deposits due to growth in non-interest bearing deposits and interest-bearing transaction accounts.
Furthermore, Veritex’s strategic positioning within the Houston and Dallas-Fort Worth metropolitan areas was seen as a competitive advantage, particularly in light of expected mergers and acquisitions activity within the banking industry.
InvestingPro Insights
Recent data from InvestingPro adds weight to Piper Sandler’s optimistic outlook on Veritex Holdings (NASDAQ:VBTX). The bank’s market capitalization stands at $1.45 billion, with a price-to-earnings ratio of 17.09, suggesting a reasonable valuation relative to its earnings. Notably, Veritex has demonstrated strong performance with a 19.89% price total return over the past three months and an impressive 34.42% return over the last six months, aligning with the positive sentiment expressed in the investor meetings.
InvestingPro Tips highlight that Veritex has been profitable over the last twelve months, and analysts predict continued profitability this year. This supports Piper Sandler’s confidence in the bank’s improving operational metrics and potential for enhanced returns. Additionally, the bank offers a dividend yield of 2.96%, which may appeal to income-focused investors.
It’s worth noting that InvestingPro has identified 7 additional tips for Veritex Holdings, providing a more comprehensive analysis for investors seeking deeper insights into the company’s prospects.
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