- First Bancorp ( NASDAQ: FBNC ) stock has gained 2.6% in Thursday morning trading after Piper Sandler analyst Stephen Scouten upgraded the stock to Overweight from Neutral after it has underperformed by ~11% so far this year.
- FBNC stock is now trading at a price/Piper 2023 EPS multiple of ~9x vs. ~10x for the rest of Scouten's coverage.
- The analyst is lowering earnings estimates "for greater expense lift from here" as all cost savings from First Bancorp's ( FBNC ) acquisition of Select Bancorp have been realized.
- Note that in June 2022, the bank agreed to acquire GrandSouth Bancorporation ( OTCQX:GRRB ) for $181.1M in stock. While Scouten has not included GrandSouth in his model, the company said it expects to achieve high single digit EPS accretion once deal is fully phased in.
- "Regardless, we still think standalone FBNC is undervalued here given its upper tier profitability potential and scarcity value as a well established NC/SC bank with over $10B-in-assets," Scouten wrote in a note to clients.
- His Overweight rating comes in more bullish than the Quant system's Hold rating and aligns with the average Wall Street rating of Buy
For further details see:
First Bancorp upgraded to Overweight at Piper after YTD underperformance