Raymond James Downgrades Bank OZK (OZK) to Market Perform

Raymond James analyst Michael Rose downgraded Bank OZK (NASDAQ: OZK) from Outperform to Market Perform.

The analyst comments "We are downgrading OZK shares from Outperform to Market Perform following 3Q25 results and its initial 2026 outlook that drives a ~12% reduction to next year’s EPS forecast (detailed below). More specifically, it guided to 2026 loan growth of mid single-digits (Street: +9.1%), 10-11% noninterest expense growth (Street: +9.4%), 4Q25 non-FTE net interest income of ~$397 million (Street: $409.0) with the goal to exhibit growth y/y (we model a slight decline), and a full-year 2025 NCO ratio above full-year 2024 of 0.20% (Street: 0.22%). Despite the sell-off in both OZK shares (-8.4%) and bank stocks (BANK -7.2%) since Wednesday, the magnitude of our EPS reduction coupled with increasing credit fears for the industry (where this quarter’s NCO ratio of 0.41% is its highest rate since 3Q18 of 1.14%) drives us to the sidelines for now despite its discounted valuation (~1.0x TBV, ~8x 2026E EPS) and elevated 13.3% short interest (link). While 2026 will bring greater earnings headwinds than previously anticipated, ongoing momentum in CIB/ other lending verticals and the expectation for a meaningful acceleration in RESG balances once growth headwinds abate should drive a notable improvement in 2027 loan growth. Moreover, its expense trajectory should further slow, it anticipates ongoing momentum in fee revenue in 2026 (and especially 2027), and usage of its $200 million share repurchase program (no repurchase in 3Q25) should help to offset the impact of near to intermediate-term growth deceleration. For now, we view risk-reward as balanced and will look to refine our model following this morning’s earnings call."

For an analyst ratings summary and ratings history on Bank OZK click here. For more ratings news on Bank OZK click here.

Shares of Bank OZK closed at $47.02 yesterday.

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