South State Stock Price Target Cuts , Truist Securities Revises EPS

Source: Investing Published 10/28/2024, 15:32

On Monday, Truist Securities revised its price target on South State Corporation (NYSE:SSB) shares to $103 from $111 previously, while maintaining a “hold” rating on the stock. The revision comes after the company’s third-quarter financial results.

which prompted the company to revise its core EPS estimates for 2024, 2025, and 2026 up by 4%, 6%, and 2%, respectively, to $7.07, $7.38, and $9.42.

The Truist Securities analyst noted that the revised estimates take into account an increase in fees, a decrease in credit loss provisions, and a reduction in expenses. Net interest income (NII) is expected to continue to benefit from the repricing of fixed-rate loans and lower deposit costs, given the company’s balance sheet’s slightly higher liabilities sensitivity.

The report also notes that the fee income outlook has become more optimistic following the quarter’s strong correspondent lending results. This positive outlook is somewhat tempered by expectations of weaker NII in the near term. Despite the price target cut, Truist Securities believes the stock is close to a fair valuation, trading at around 12.8 times the company’s expected 2025 EPS.

In conclusion, the new price target of $103 reflects a valuation of 14.0 times the company’s estimated 2025 EPS.

down from the previous target of $111. This new target was set in light of South State Corporation’s recent financial performance and analyst expectations for the company’s future earnings trajectory.

In other recent news, South State Corporation has been the subject of significant developments. The company reported strong financial performance in its Q3 2024 earnings call, showing growth in loans, deposits, revenues, and EPS. Additionally, the company expects mid-single-digit growth and an improvement in the yield curve for 2025.

After reviewing these results, Piper Sandler raised its price target on South State from $110 to $112 while maintaining an “higher weight” rating. The firm raised South State’s earnings estimates for 2024-26.

citing effective expense management and the potential for further release of loan loss reserves.

Another key development is South State’s ongoing merger with Independent Financial, scheduled to close by summer 2025. The merger is expected to improve the sensitivity of South State’s balance sheet liabilities.

InvestingPro Insights

South State Corporation’s recent financial performance and future outlook are in line with several key metrics and insights from InvestingPro. The company’s P/E ratio of 14.72 is in line with Truist Securities’ valuation of 14.0 times its estimated 2025 earnings. This suggests that the current market valuation is in line with analyst expectations.

InvestingPro data shows that South State Corporation has grown revenue by 2.63% over the past 12 months.

with a more impressive 10.39% quarterly revenue growth in Q3 2024. This growth trend supports Truist Securities’ upward revision of its EPS estimates for the coming years.

Two related InvestingPro tips highlight the company’s financial stability and growth potential. First, “South State Corporation has raised its dividend for 13 consecutive years,” indicating a strong commitment to shareholder returns. Second, “Analysts expect the company to be profitable this year,” which is in line with Truist Securities’ positive EPS forecast. For investors looking for a more comprehensive analysis.

InvestingPro offers 5 additional tips that can provide further insight into South State Corporation’s financial health and market position.