Keefe, Bruyette & Woods (KBW) has raised its price target for Banc of California (NYSE:BANC) by $1 from $22.00 to $23.00, reaffirming its Outperform rating on the banking institution.
The decision comes as KBW acknowledges the bank's solid growth trajectory alongside enhanced return profiles, which collectively underpin its valuation. Currently, Banc of California's shares trade at around 1.2 times tangible book value per share. Data from InvestingPro indicates a price-to-book ratio of 1.09 and a remarkably low price-to-earnings-to-growth (PEG) ratio of 0.14, suggesting that the stock may be undervalued when weighed against its anticipated growth prospects.
While KBW has maintained its 2026 earnings forecasts for Banc of California, it has adjusted its 2027 earnings estimates upward by 2%. The research firm emphasized that its overall outlook remains stable but sees potential upside should the bank exceed growth expectations in both loans and deposits.
Additionally, KBW's analysts highlighted that pre-provision net revenue might surpass their somewhat conservative projections, pointing to the bank's operational strength in the California market.
Supporting this positive outlook, Banc of California's recent fourth-quarter report exceeded analyst consensus, with earnings per share (EPS) of $0.42 outperforming the expected $0.37. Revenue also surpassed estimates, coming in at $292.9 million versus the anticipated $289.43 million. Notably, the bank achieved an annualized 15% rise in total loans and leases, reaching $25.2 billion.
Further validating the optimistic sentiment, Raymond James raised its price target for the bank from $20 to $24, maintaining a Strong Buy rating citing Bain of California's better-than-expected quarterly results and strategic progress. Similarly, DA Davidson upheld its Buy rating and set a $24 price target, underscoring the bank's stronger earnings per share and pre-provision net revenue, alongside a 6 basis point expansion in core net interest margin.
These developments highlight Banc of California's solid loan growth, especially in the commercial and industrial lending sectors, reinforcing its attractive position within the financial services industry.