On Friday, Camden National Corporation (NASDAQ:{{15627|CA) received an upgraded stock rating from Raymond (NS:) James, moving from Market Perform to Outperform, with a new price target set at $50.00. This target is consistent with the analysts’ broader expectations ranging from $43 to $53, and current assessments indicate that the stock is modestly undervalued.
This upgrade comes on the heels of recent meetings between investors and the bank’s senior leadership, including CEO Simon Griffiths, CFO Mike Archer, and Chief Experience and Marketing Officer Renée Smyth.
The Raymond James analyst emphasized the management’s dedication to expanding Camden National’s footprint in New England, with a strategy aimed at increasing profitability to rank among the top quartile of banks.
Currently trading at a P/E ratio of 13.14x and having maintained a dividend for 28 consecutive years, the bank has consistently provided shareholder returns. The analyst anticipates a notable increase in earnings for 2025 and 2026, primarily driven by an expansion in the net interest margin (NIM) as the Federal Reserve is expected to cut rates and fixed-rate assets are repriced.
Moreover, the recent acquisition of NWYF is predicted to enhance Camden National’s earnings further. The analyst believes that these developments will collectively support a higher valuation multiple over time based on cash earnings per share (EPS).
The $50.00 price target reflects the analyst’s optimism regarding Camden National’s future performance and prospects for stock appreciation.
This upgrade is underpinned by the bank’s strategic initiatives and the anticipated favorable financial results from these moves.
In other news, Camden National Corporation declared a quarterly dividend of $0.42 per share, maintaining its impressive 28-year streak of uninterrupted dividend payments.
In its recent third-quarter earnings call for 2024, the company reported a net income of $13.1 million, or $0.90 per share, representing a 9% increase from the previous quarter. When adjusted for merger-related expenses, the net income rose to $13.6 million, or $0.94 per share, an increase of 14%.
Camden National also announced plans to acquire Northway Financial, with the merger expected to finalize in Q1 2025, which is likely to augment the company’s market share in Northern New England. Additionally, the company reported a 10 basis point improvement in net interest margin to 2.46%, a 1% increase in deposits, and growth in both the total risk-based capital ratio and the TCE ratio.
Analysts from InvestingPro have raised their earnings projections, indicating that the company seems slightly undervalued. Looking ahead, the company anticipates a 1% to 3% growth in loans for 2024, not accounting for the Northway merger’s effects. Camden National expects the net interest margin to expand by 2 to 5 basis points in the next quarter, along with plans to introduce a revamped account opening process by year-end for an enhanced customer experience.
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