Bank OZK (OZK) PT Raised to $40 at Citi

Citi analyst Benjamin Gerlinger raised the price target on Bank OZK (NASDAQ: OZK) to $40.00 (from $38.00) while maintaining a Sell rating.

The analyst comments "Following the stronger than expected 4Q24 NIM result, we believe the outsized short positing set-up likely played a large contributing factor in last Friday’s move higher. With the better than feared PPNR result driving the upside narrative, we believe the positioning is likely much more balanced post-results. However, we believe the continuous NCO trend of the Chicago Land Loan and elevated LLP expense (ex unfunded commitments) sets the stage for what we believe could be a turbulent 12-24 months. In a higher for longer interest rate environment, we believe OZK is likely to generate stronger revenue (given asset-sensitivity) but this environment also creates more interest pain for their sponsors. We increased our TP to $40 (+$2), but expect the current set-up to have outsized risk relative to reward with ramping loan modifications and a very lackluster Life Science and Office CRE environment."

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