Keefe, Bruyette & Woods (KBW) has raised its price target for Great Southern Bancorp (NASDAQ: GSBC) to $63 from $61, following the company’s robust fourth-quarter 2025 earnings report. The bank’s earnings per share and revenue exceeded expectations, supported by stable net interest margins, increased fee income, and controlled expenses. Despite some headwinds on loan growth and minor downward revisions in future earnings projections, KBW affirms a Market Perform rating for the stock.
Key Points
- Keefe, Bruyette & Woods raises Great Southern Bancorp’s price target to $63 from $61 amid strong fourth-quarter earnings.
- The bank’s operating earnings of $1.49 per share exceed expectations, driven by solid pre-provision net revenue and a lower tax rate despite higher provisions.
- Loan balances declined due to sustained payoffs, allowing the bank to reduce expensive brokered deposits and manage funding costs effectively.
In its latest update, Keefe, Bruyette & Woods (KBW) increased the price target on Great Southern Bancorp (NASDAQ: GSBC) from $61.00 to $63.00 while maintaining a Market Perform rating. This revision takes place in the context of the company’s financial results for the fourth quarter of 2025, which notably outpaced consensus estimates.
Great Southern Bancorp reported operating earnings per share of $1.49, surpassing KBW’s expectations due in part to enhanced pre-provision net revenue (PPNR) and a favorable reduction in the effective tax rate. These positives compensated for the impact of an elevated provision expense. The bank's valuation metrics showed a price-to-earnings ratio of 10.82 and a price/earnings-to-growth ratio of 0.58, indicating the stock’s relatively low valuation compared to its potential near-term earnings growth.
KBW emphasized that the firm’s PPNR strength was propelled by several elements, including a nearly stable net interest margin, which only contracted by 2 basis points on a sequential quarter basis, a rise in loan-related charges and fees, growth in other income sources, and tight expense management. Despite the robust originations, loan portfolio growth was hindered by sustained loan repayments, causing quarterly loan balances to contract by an annualized 10%. This contraction facilitated the bank’s strategy to reduce funding costs by letting go of higher-cost brokered deposits from its balance sheet.
Furthermore, Great Southern Bancorp has a longstanding history of consistent dividend payments, having distributed dividends for 36 straight years. Its current dividend yield stands at 2.59%, which reflects a reasonable income return for shareholders.
Looking ahead, KBW has moderated its earnings estimates for 2026 and 2027 by five cents each year. These adjustments are attributed to expectations of lower net interest income and slightly increased provisions, reflecting some cautiousness in forecast assumptions. Over the past year, the GSBC stock has delivered an impressive total return of 16.8%, demonstrating resilient investor interest.
In addition to this update, Great Southern Bancorp reported its earnings for the last quarter of 2025, where it posted an EPS of $1.45, exceeding the forecasted $1.34 by 8.21%. Revenues also came in stronger than anticipated at $56.35 million compared to the expected $55.03 million. Although these earnings and revenue figures mark a healthy financial performance, the stock price experienced a minor decrease in premarket trading sessions.
Investors monitoring Great Southern Bancorp’s financial indicators will note the company's ability to outperform projections despite facing pressures within loan balances. The proactive funding strategy and stable margin performance remain key elements influencing the bank’s financial stability and shareholder returns.
Risks
- Loan growth pressured by continued repayments could impact future earnings and balance sheet expansion stability.
- Slight downward revisions in 2026 and 2027 earnings estimates reflect challenges including lower net interest income and higher provision expenses.
- The slight decline in premarket stock price following strong earnings raises questions about market sentiment and future volatility.