Keefe Bruyette raises First Citizens BancShares target, retains rating

Keefe, Bruyette & Woods increased its price target for shares of First Citizens BancShares (NASDAQ:FCNCA) to $2,300 from $2,100, while retaining an Outperform rating on the stock.

The firm’s analysts noted the bank’s recent announcement of a substantial share buyback program valued at $3.5 billion, which equates to 13% of its outstanding shares. The program is expected to be front-end loaded, meaning a significant portion of the buyback will occur in the earlier part of the schedule.

The firm is also optimistic about the potential for another buyback program in the second half of 2025. In light of these developments, Keefe, Bruyette & Woods has increased its earnings estimates for First Citizens BancShares for the years 2024 and 2025 by 5% and 3%, respectively.

The analyst pointed out the firm’s positive view of the stock, suggesting that investors should maintain their positions. According to the firm, First Citizens BancShares is considered one of its top investment ideas currently.

First Citizens reported its second quarter of 2024 earnings and shared its plan to repurchase up to $3.5 billion of its Class A common shares. The company’s net income for the quarter was $707 million, with adjusted net income reported at $755 million. Net interest income modestly increased to $1.82 billion, and noninterest income saw a small rise to $639 million.

Meanwhile, Jefferies recently initiated coverage on the bank’s stock with a Buy rating, citing growth potential and expectations for increased capital returns in 2024. DA Davidson revised its price target for the bank to $1,850, while Keefe, Bruyette & Woods increased the bank’s stock target to $2,100.

However, Piper Sandler downgraded the bank from Overweight to Neutral, suggesting the potential for significant gains has largely diminished despite positive performance trends.

InvestingPro Insights

Following the recent optimistic outlook from Keefe, Bruyette & Woods on First Citizens BancShares, real-time data from InvestingPro further enriches the narrative for potential investors. With a robust market capitalization of $29.74 billion and an attractive P/E ratio standing at 9.73, the bank’s financial health appears sturdy. The substantial revenue growth over the last twelve months, reported at a staggering 142.99%, aligns with the firm’s positive assessment of First Citizens BancShares’ future prospects.

InvestingPro Tips suggest that while the stock has experienced a significant return over the last week, with a 11.91% price total return, it is currently trading near its 52-week high, at 98.76% of this peak value. Additionally, First Citizens BancShares has demonstrated a commitment to shareholder returns, having raised its dividend for 8 consecutive years and maintained dividend payments for 39 years in a row. For investors seeking further insights and tips, there are additional recommendations available on InvestingPro, which can be accessed with the coupon code PRONEWS24 for up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.

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