Analysts raised their price target for M&T Bank to $218.75, citing constructive macro conditions, potential regulatory relief, and strong Q2 results—including improved fee income and lower credit costs—though enthusiasm is moderated by softer loan growth expectations.
Analyst Commentary
- Bullish analysts see constructive macro conditions and potential for further upside, supported by prospects of deregulation, improved sentiment, M&A activity, and expectations for solid loan growth in the second half of the year.
- Several brokerages have raised price targets on solid Q2 results, citing stronger fee income, lower credit costs, and positive operating leverage, although reduced net interest income guidance due to weaker loan growth tempers enthusiasm.
- Regulatory relief and reduced capital requirements are viewed as supporting large bank fundamentals, contributing to recent share outperformance, though subdued loan growth and moderate fundamentals keep valuations elevated.
- Bullish analysts highlight the long-term structural benefits of scale for large-cap banks and prefer business models with predictable, leading returns.
- The relatively wide valuation discount of midcap banks to large banks, improving credit, ongoing stock buybacks, and early signs of loan growth acceleration are seen as positive near-term catalysts.
What's in the News
- Settled a lawsuit regarding violations of the Consumer Protection Act, emphasizing the importance of honoring Durable Powers of Attorney and protecting elder rights, with full reimbursement of probate-related expenses to the estate.
- Increased quarterly cash dividend to $1.50 per share, up 11% from the previous $1.35.
- Reported net charge-offs of $108 million for Q2, down from $137 million year-over-year.
- Completed buyback of 9,486,987 shares (5.8% of shares outstanding) for $1.74 billion under the 2025 program.
- Added to the Russell 1000 Defensive Index and Russell 1000 Value-Defensive Index.
Valuation Changes
Summary of Valuation Changes for M&T Bank
- The Consensus Analyst Price Target remained effectively unchanged, moving only marginally from $216.74 to $218.75.
- The Future P/E for M&T Bank remained effectively unchanged, moving only marginally from 13.23x to 13.40x.
- The Consensus Revenue Growth forecasts for M&T Bank remained effectively unchanged, at 4.5% per annum.
Disclaimer
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