Overview
Raymond James has trimmed its price target on First Citizens BancShares (FCNCA) to $2,350 from $2,440, while preserving a Strong Buy rating on the shares. The new target remains above the prevailing market price of $2,016.56, implying roughly 17% upside from current levels.
Analyst range and market context
Analysts' price targets compiled by InvestingPro span from $2,000 to $2,600, reflecting a range of views on valuation and outlook. The change in the Raymond James target followed a market reaction to the bank's fourth-quarter financial report, which saw the stock fall 8.5% on the day of the release. For context, the BKX banking index declined 2.2% over the same period.
Driver of the move
Raymond James said investor concerns centered on First Citizens' 2026 outlook, citing guidance around net interest margin and operating expenses as key contributors to the negative reaction. In response, the firm lowered its earnings expectations for the company to reflect those outlooks, while defending its overall investment thesis.
Earnings and estimates
First Citizens reported operating earnings per share of $47.26 for the quarter, a result that exceeded analyst expectations. Following the report, Raymond James reduced its 2026 EPS estimate by $7.86 to $182.96 and trimmed its 2027 EPS estimate by $7.98 to $213.30. The bank's basic earnings per share over the last twelve months stands at $169.32, and consensus analyst forecasts put EPS for fiscal 2025 at $177.01.
Factors behind revised forecasts
The firm outlined several reasons for the downward adjustments to its projections: a smaller forecasted balance sheet, a narrower net interest margin, lower expected loss provisions tied to improved credit metrics, a more favorable noninterest income outlook, and higher operating expense assumptions for 2026 to account for incremental investments.
Balance sheet actions and capital management
First Citizens has indicated it would likely sell loans to free up assets to repay an FDIC note. Management has also been active in buying back shares, a point highlighted by InvestingPro Tips. The platform indicates there are additional tips available to subscribers and notes management's aggressive repurchase activity.
Valuation and shareholder metrics
InvestingPro data shows First Citizens trading at a price-to-earnings ratio of 12.2 and delivering an earnings yield of about 11%, figures Raymond James cited in characterizing the recent pullback as "a unique buying opportunity." The bank has a long history of dividend payments - 41 consecutive years of distributions - and currently offers a dividend yield of 0.42%. InvestingPro reports dividend growth of 28.05% over the past twelve months.
Recent performance and investor reaction
The stock's decline following the results has contributed to a year-to-date total return of -6.04%. Despite that drop, InvestingPro's financial health scoring assigns the bank a "GOOD" overall rating with a score of 2.68. Raymond James retained its positive stance on the company even as it set lower earnings forecasts.
Additional context from the quarter
Beyond the headline EPS beat, the company pointed to robust loan growth and stable credit quality as central to the quarter's adjusted results, descriptions that market participants commonly view as indicators of operational strength. The published report did not list any immediate analyst upgrades or downgrades following the earnings release, though the earnings beat was described as supportive of positive sentiment among investors.
Where to find deeper analysis
For readers seeking expanded coverage, InvestingPro's Pro Research Report offers Fair Value estimates and a broader set of financial health metrics for First Citizens and more than 1,400 other U.S. equities.
Key points
- Raymond James cut its price target on FCNCA to $2,350 from $2,440 but kept a Strong Buy rating.
- The stock dropped 8.5% after the fourth-quarter results amid concerns over 2026 net interest margin and operating expense guidance.
- InvestingPro data shows a P/E of 12.2, an earnings yield of 11%, and a dividend yield of 0.42% with 41 consecutive years of payouts.
Risks and uncertainties
- Guidance risk - The bank's 2026 net interest margin and operating expense outlook prompted the market reaction and underpin uncertainty for near-term earnings.
- Balance sheet and liquidity actions - Plans to sell loans to free assets for repaying an FDIC note could affect earnings variability and balance sheet composition.
- Market reaction risk - The recent share-price decline and its effect on total returns reflect sensitivity to forward guidance and could influence investor sentiment in the financials sector.