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Nicolet Bankshares stock gets downbeat view from Stephens amid NIB miss

On Thursday, Stephens, a financial services firm, revised its price target for Nicolet Bankshares (NASDAQ:) (NYSE: NIC (NASDAQ:)), lowering it to $88 from the previous $92, while keeping an Equal Weight rating on the stock. This adjustment follows Nicolet Bankshares’ release of first-quarter earnings for 2024, which surpassed expectations.

Nicolet reported a strong start to the year with first-quarter operating earnings per share (EPS) of $1.72, exceeding the analyst’s estimate of $1.55. The bank’s performance was bolstered by positive credit quality trends, with net charge-offs (NCOs) totaling just $13,000, and an increase in loans. These factors are indicative of the strength of Nicolet’s commercial-focused community banking model.

Despite the positive earnings, the bank experienced a decrease in non-interest-bearing (NIB) deposits by approximately $293 million during the quarter, a trend partly attributed to seasonal factors.

Customers have been shifting towards products with higher yields, although nearly 80% of the bank’s deposits are non-time deposits, and about two-thirds of its deposit customers have been with Nicolet for over a decade.

The bank’s capital levels saw an improvement in the last quarter, with tangible common equity (TCE) reaching 8.33% and a return on tangible common equity (ROTCE) of 17% in the first quarter of 2024.

Additionally, management has been engaging in high-level discussions with potential partners, which is noteworthy given Nicolet’s history of acquisitions in the upper Midwest. As of the end of the first quarter, Nicolet’s assets stood at $8.4 billion.

The report from Stephens focuses on Nicolet’s quarterly results, with particular attention to capital, credit, and deposit trends. The firm’s maintained Equal Weight rating and new price target of $88 reflect a comprehensive review of these key financial metrics following the bank’s earnings report for the first quarter of 2024.

InvestingPro Insights

Following the recent earnings release by Nicolet Bankshares, real-time data from InvestingPro provides a broader perspective on the company’s financial health and market position. With a market capitalization of $1.13 billion and a price-to-earnings (P/E) ratio of 12.04, Nicolet is trading at a valuation that may attract investors looking for reasonable pricing relative to near-term earnings growth prospects. The adjusted P/E ratio for the last twelve months as of Q1 2024 stands slightly lower at 11.51, further underscoring this point.

Revenue growth remains a bright spot, with an impressive increase of 29.53% over the last twelve months as of Q1 2024. Nicolet’s ability to grow its top line is evident from the quarterly revenue growth of 156.33% in Q1 2024, which aligns with the positive earnings results highlighted by Stephens. However, InvestingPro Tips indicate that the company suffers from weak gross profit margins, which is an area that might require attention from the management.

For investors considering Nicolet’s stock, it’s worth noting that analysts predict the company will be profitable this year and that it has been profitable over the last twelve months. Additionally, Nicolet has delivered a high return over the last decade, which speaks to its long-term performance. For more in-depth analysis and additional tips, including three more analysts’ insights on Nicolet Bankshares, visit InvestingPro at https://www.investing.com/pro/NIC. Use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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