1st Source (SRCE) PT Raised to $60 at Piper Sandler

Piper Sandler analyst Nathan Race raised the price target on 1st Source (NASDAQ: SRCE) to $60.00 (from $59.00) while maintaining a Overweight rating.

The analyst commented, "Apart from some elevated idiosyncratic NCOs, SRCE's 1Q results were again solid with 12% PPNR upside via continued NIM expansion and strong cost controls. We believe NII growth will likely continue to outpace most peers and regardless of the interest rate environment partially due to SRCE’s more durable organic B/S growth prospects, which should contribute to superior operating leverage this year. Accordingly, we reiterate SRCE at Overweight and as we also favor SRCE’s superior profitability profile, likely more benign future credit quality metrics (vs. NCOs of 38 bps in 1Q), and more proactive excess capital management ability. We raise our 2024E / 2025E EPS to $4.80 / $4.65 (+6% / +7%) to reflect higher NII and lower operating expenses expectations post 1Q outperformance. We raise our PT to $60 (+$1) based on 13.0x our 2025E EPS (-0.5x on lower peer multiples) and still consistent with a premium to peers (10.0x)."

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