D.A. Davidson on Thursday hiked its profit forecast and price target while reiterating a neutral rating on First Citizens Bancshares Inc. FCNCA after the bank provided a first-quarter update following its announced acquisition of Silicon Valley Bank. D.A. Davidson analyst Kevin Fitzsimmons said First Citizens Bancshares “delivered a very positive follow-up” to the March 27 announcement that it would buy Silicon Valley Bank from the Federal Deposit Insurance Co. The bank’s total book value is increasing more than expected, with management forecasting 2023 earnings per share of $150 to $161 a share, ahead of the latest analyst consensus estimate of $143.72 a share, according to FactSet data. D.A. Davidson hiked its adjusted 2023 earnings outlook for First Citizens Bancshares by $5.82 to $152.86 a share and raised its price target to $1,325 from $1,050 a share. “It’s clear that the SVB deal was a compelling transaction from a financial standpoint,” Fitzsimmons said. “All that said, we’re remaining on the sidelines for now, as the stock is already up meaningfully, and besides environmental headwinds, there are certain risks to monitor, including ongoing deposit outflow at SVB, and considerable digestion ahead for a bank that has now doubled in size twice over the past few years.” First Citizens Bancshares stock is up 55% in 2023, compared to a 7.8% gain by the S&P 500 SPX.
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