Piper Sandler Downgrades First Guaranty Bancshares (FGBI) to Underweight

Piper Sandler analyst Stephen Scouten downgraded First Guaranty Bancshares (NASDAQ: FGBI) from Neutral to Underweight with a price target of $9.50 (from $12.00).

The analyst comments "Downgrading to Underweight; Updating '23/'24E & Establishing '25E - We are lowering our rating on FGBI to UW from N and updating our model following 3Q23 earnings. Our '23/'24 estimates decline to $0.74/$0.36 from $0.75/$0.72, while we establish '25E of $0.90 as earnings begin to recover on FFR relief. With core expenses up 12% y/y and core revenues down 18% y/y, the profitability profile at FGBI has taken a substantial hit. The ROA was 0.14% in 3Q, and we aren't expecting much improvement until mid/late-2025 as the benefit of NIM expansion is mostly offset by normalization in the provision line. Additionally, TCE seems slim at 5.6% (3.6% incl. HTM losses), which we think may deter investors who are wary of economic uncertainty. We are lowering our PT to $9.50, now based on ~0.6x year-out TBV (0.75x prior) due continued pressure on FGBI's fundamentals. This also equates to ~10.5x our 25E EPS."

For an analyst ratings summary and ratings history on First Guaranty Bancshares click here. For more ratings news on First Guaranty Bancshares click here.

Shares of First Guaranty Bancshares closed at $9.89 yesterday.

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