On Monday, Keefe, Bruyette & Woods maintained a Market Perform rating on United Bankshares Inc. (NASDAQ:UBSI) with a steady stock price target of $38.00. The firm's decision comes in light of the recent acquisition of Piedmont Bank, which prompted an increase in the 2025 earnings per share (EPS) estimates for United Bankshares.
The updated EPS forecast is now set at $2.88, a 7% rise from the previous estimate of $2.70. The adjustment reflects the financial impact of the Piedmont Bank transaction, which was made public this quarter. Keefe, Bruyette & Woods expressed a positive view of the deal, citing the manageable size of the acquisition—equivalent to 7% of United Bankshares' assets—as well as the expected earnings per share accretion and the attractive tangible book value earnback period.
The acquired bank, Piedmont, is noted for its high profitability and minimal credit risk, attributes that align with United Bankshares' strategic interests. The firm's commentary highlighted the suitability of the deal for United Bankshares, fitting the company's profile for the type of acquisitions they are inclined to pursue.
The affirmation of the $38 stock price target reflects Keefe, Bruyette & Woods' outlook on United Bankshares' stock value following the integration of Piedmont Bank into its operations. The acquisition is viewed as a strategic move that could bolster United Bankshares' market position by enhancing its financial metrics and expanding its asset base.
In other recent news, United Bankshares has made notable strides in its financial performance and strategic growth. The company announced a Q2 dividend of $0.37 per share, continuing its 50-year streak of annual dividend increases. This payout, totaling approximately $52.7 million, is a testament to the company's robust financial health.
Simultaneously, United Bankshares has also been under the analyst's lens. DA Davidson raised the company's stock target to $36.00, up from $35.00, while maintaining a Neutral rating. This adjustment followed the announcement of United Bankshares' acquisition of Piedmont Bancorp.
Conversely, Keefe, Bruyette & Woods reduced the price target for the company to $38 from $40, citing a mixed forecast for the year ahead, despite the company's Q1 2024 performance meeting expectations.
In strategic developments, United Bankshares has entered a definitive agreement to acquire Piedmont Bancorp, marking its 34th acquisition. This merger is expected to enhance United's presence in the Southeast, with the combined entity boasting over $32 billion in assets. The acquisition, valued at approximately $267 million, is expected to close by early 2025, subject to regulatory approvals and other customary closing conditions.
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