Piper Sandler maintains Neutral rating on Great Southern Bancorp stock
Great Southern Bancorp (NASDAQ: NASDAQ:) has received a reiterated Neutral rating and a constant price target of $46.00 from Piper Sandler.
The reiteration came after the company reported its third-quarter earnings per share (EPS) of $1.41, surpassing both Piper Sandler’s estimate by $0.14 and the consensus on Wall Street by $0.15.
The bank’s better-than-expected results included a $0.04 contribution from the sale of foreclosed properties. Although this gain is not expected to be a regular occurrence, the earnings still exceeded expectations without it. Core expenses, not including the one-time gain from the sale of foreclosed properties, were lower than expected, contributing to a $0.06 per share decrease compared to the model.
Great Southern’s net interest income (NII) was also higher than anticipated by $0.02, attributed to a larger earning asset base than Piper Sandler had projected. The bank experienced minimal margin compression, with the net interest margin falling by just one basis point to 3.42%, very close to the 3.41% forecasted by Piper Sandler.
In other recent news, Great Southern Bancorp reported an increase in earnings for the second quarter of 2024, achieving $1.45 per diluted common share, amounting to $17 million. The financial health of the company remained sturdy, with a strong capital position and considerable liquidity. Net interest income reached $46.8 million, with a net interest margin of 3.43%, while non-interest income experienced a rise to $9.8 million.
Great Southern Bancorp’s loan portfolio observed modest growth, especially in the multifamily segment. Despite the rise in non-interest expenses, primarily due to compliance costs, the bank maintained a solid efficiency ratio and did not record a provision for credit losses on outstanding loans. The company anticipates a stable effective tax rate and plans to manage its margin and expenses carefully, without adding more securities to its portfolio for the time being.
Analysts have noted the company’s strong capital and liquidity positions and its careful approach to managing expenses. There are plans to maintain an expense run rate of about $35 million, excluding non-recurring costs.
The company is also reevaluating its stock buyback program considering rising share prices and upcoming debt obligations.
InvestingPro Insights
Building on Great Southern Bancorp’s (NASDAQ:GSBC) strong third-quarter performance, recent data from InvestingPro offers additional context for investors. The company’s P/E ratio of 11.58 suggests that the stock may be undervalued relative to its earnings, which aligns with the bank’s ability to surpass earnings expectations.
InvestingPro Tips highlight that Great Southern Bancorp has maintained dividend payments for 35 consecutive years, demonstrating a commitment to shareholder returns that may appeal to income-focused investors. This is particularly noteworthy given the bank’s recent strong performance and could be seen as a sign of financial stability.
However, it’s important to note that InvestingPro data shows a revenue decline of 6.14% over the last twelve months. This contrasts with the bank’s recent earnings beat and may warrant closer attention from investors considering the stock’s long-term prospects.
For a more comprehensive analysis, InvestingPro offers 11 additional tips for Great Southern Bancorp, providing deeper insights into the company’s financial health and market position.
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