By Sam Boughedda
First Citizens BancShares Inc (NASDAQ:FCNCA) hit an all-time high on Wednesday, up more than 4%, after UBS analysts double-upgraded the stock to Buy from Sell, raising the price target to $1,206 from $538 following the announcement of the company's acquisition of SIVB.
The analysts argued that tangible book value per share (TBVPS) accretion should be a positive catalyst for a further re-rate.
The analysts wrote: "We increased our 2024E EPS to $141.36 from $86.01, and our YE2023 tangible book value per share (TBVPS) to ~$1,423 from ~$659 due the acquisition."
"We increased our target P/E and P/ TBV multiples to 8.0x (from 6.0x) and 0.9x (from 0.85x), as we view the balance sheet as more well positioned to handle a recession going forward given the low loss nature of the SIVB loan portfolio, which should result in a higher quality earnings stream."
They said UBS believes FCNCA's shares are "well positioned to leg higher from here with 1Q23 earnings, once TBVPS accretion is more well known."