Piper Sandler analyst Nathan J. Race upgraded UMB Financial Corporation (NASDAQ: UMBF) to Overweight from Neutral, with a price target of $74.
With fewer, if any, additional Fed rate hikes expected going forward, the analyst believes UMBF can generate superior NII growth in 2H23 and 2024 with ongoing expansion in loan yields.
The analyst adds that UMBF boasts an enviable mix of differentiated fee income businesses (35% of LTM revenue vs. peers at 19%) that have generated above-average growth historically, including 19% YoY in 2Q23 (vs. peers at -4%).
Race expects UMBF's continued strong fee income growth prospects to contribute to UMBF's superior trajectory in overall revenue.
The analyst models the company's core fee income at $543 million and $546 million ...