Raymond James has elevated its rating on Valley National Bancorp (NASDAQ:VLY) from Market Perform to Strong Buy and set a price objective of $15.00, which the firm says represents about an 18% premium to the current share price of $12.67.
In its assessment, Raymond James framed the bank’s trajectory as a move from defense to offense - a reversal from the past two years when management focused on reserve building and balance sheet de-risking. The analyst house cited that the strategic pivot appears to be producing results, noting that Valley National shares have returned 37.59% over the past six months.
The upgrade rests on several specific performance indicators. Raymond James pointed to an inflection in loan growth and accelerating net interest margin momentum as drivers of improving revenue dynamics. The firm also indicated that credit costs look to have peaked, removing a major overhang that weighed on the company’s operating performance in earlier periods.
Valley National’s valuation metrics were highlighted as well. InvestingPro data flagged a PEG ratio of 0.34 for the stock, a level the source described as attractive relative to the bank’s growth prospects. Raymond James additionally called out operating leverage that should improve as the revenue mix and expense trends evolve, and noted that growing capital flexibility could allow the bank to commence share repurchases - a move the firm labeled a "fundamental turning point."
For income-focused investors, Valley National’s dividend track record was emphasized: the bank has maintained dividend payments for 52 consecutive years and the current yield stands at 3.47%, per the analysis referenced by Raymond James.
On relative valuation, Raymond James observed that Valley National trades at an 11% discount to its peer group, an assessment the firm described as providing an "attractive" risk-reward profile. The analyst house suggested that continued execution and profitability improvements could prompt a re-rating toward peer multiples. That view is consistent with InvestingPro’s Fair Value analysis, which also indicates the stock is currently undervalued.
Separately, Valley National reported fourth-quarter 2025 results that exceeded consensus expectations. The bank recorded earnings per share of $0.31, topping the forecast of $0.29 by 6.9%. Revenue for the period came in at $541.2 million, surpassing the projected $525.34 million by 3.02%. The company did not report any merger or acquisition activity, and there were no changes in analyst ratings disclosed in the recent updates.
Taken together, the upgrade from Raymond James and the stronger-than-expected fourth-quarter results provide evidence, according to the firm, that Valley National is moving into a more positive phase of its operating cycle. Investors evaluating the name will weigh the potential upside signaled by the $15 target against execution risk and broader market dynamics affecting regional banks.
Summary - Raymond James raised Valley National Bancorp to Strong Buy with a $15 price target, citing a strategic shift to offense, improving loan growth and margin momentum, and apparent peaking of credit costs. The bank also posted Q4 2025 results above expectations on EPS and revenue.
- Key points:
- Raymond James upgraded VLY from Market Perform to Strong Buy and set a $15 target, roughly 18% upside from $12.67.
- The analyst cited an offensive strategic shift, inflecting loan growth, improving net interest margin momentum, and credit costs that appear to have peaked.
- Valley National beat Q4 2025 EPS ($0.31 vs $0.29 forecast) and revenue ($541.2M vs $525.34M forecast); dividend streak is 52 years at a 3.47% yield.
- Risks and uncertainties:
- Execution risk - further improvement depends on management translating inflecting loan growth and margin momentum into sustained profitability, which is not guaranteed.
- Valuation re-rate uncertainty - although the shares trade at an 11% discount to peers, any delay in profitability improvements could prevent the expected re-rating toward peer multiples.
- Credit-cost trajectory - while credit costs appear to have peaked per the analysis, any reversal would negatively affect earnings and capital flexibility.