Stellar Bancorp Inc. saw its stock price rise by 11.43% as it crossed above the 5-day SMA, reflecting positive investor sentiment following the announcement of its merger with Prosperity Bancshares.
The merger agreement, valued at approximately $2 billion, involves Prosperity acquiring Stellar for $11.36 in cash and 0.3803 shares of Prosperity stock per Stellar share. This deal is expected to close in Q2 2026 and positions Prosperity as the second-largest bank in Texas, enhancing its competitive edge in the region. The leadership transition will see Stellar's CEO and President take on significant roles in Prosperity, ensuring continuity in management.
This merger not only strengthens Prosperity's market position but also reflects a strategic move to capitalize on growth opportunities in Texas. Investors are optimistic about the potential for increased market share and enhanced service capabilities in the Houston area.
Wall Street analysts forecast STEL stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for STEL is 32.50 USD with a low forecast of 32.00 USD and a high forecast of 33.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
2 Analyst Rating
Wall Street analysts forecast STEL stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for STEL is 32.50 USD with a low forecast of 32.00 USD and a high forecast of 33.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
1 Buy
1 Hold
0 Sell
Moderate Buy
Current: 36.420
Low
32.00
Averages
32.50
High
33.00
Current: 36.420
Low
32.00
Averages
32.50
High
33.00
Keefe Bruyette
Market Perform
maintain
$32 -> $33
2025-10-27
Reason
Keefe Bruyette
Price Target
$32 -> $33
AI Analysis
2025-10-27
maintain
Market Perform
Reason
Keefe Bruyette raised the firm's price target on Stellar Bancorp to $33 from $32 and keeps a Market Perform rating on the shares.
Raymond James
David Feaster
Outperform
downgrade
$34 -> $32
2025-10-24
Reason
Raymond James
David Feaster
Price Target
$34 -> $32
2025-10-24
downgrade
Outperform
Reason
Raymond James analyst David Feaster lowered the firm's price target on Stellar Bancorp to $32 from $34 and keeps an Outperform rating on the shares following Q3 results. Raymond James told investors that loan growth remains challenging as payoffs/paydowns continue to offset solid originations, where there was some slippage into Q4 as well. The firm added that pipelines suggest activity remains solid and it expects to outpace these headwinds next year. Raymond James continues to see the outlook favorably for Stellar Bancorp as growth accelerates, and the firm sees it as likely to outperform in light of the "strong" economic backdrop in Texas and its pure-play footprint, especially as industry consolidation continues.
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Piper Sandler
Neutral
maintain
$27 -> $30
2025-07-29
Reason
Piper Sandler
Price Target
$27 -> $30
2025-07-29
maintain
Neutral
Reason
Piper Sandler raised the firm's price target on Stellar Bancorp to $30 from $27 and keeps a Neutral rating on the shares. The firm notes loan originations nearly doubled to $640M since the prior quarter, signaling a return to organic growth, while asset quality remained strong with NCOs/Avg. Stellar Bancorp continues to be positioned for core growth in the second half of 2025, assisted by management focus on core deposits, their opportunistic Texas-based M&A attitude, and the bank's robust 15.98% total risk-based capital, Piper points out. That said, accretion run-off will still pressure overall earnings growth, and the firm does not see a more meaningful catalyst to earnings as likely near-term.
Keefe Bruyette
Market Perform
maintain
$29 -> $32
2025-07-28
Reason
Keefe Bruyette
Price Target
$29 -> $32
2025-07-28
maintain
Market Perform
Reason
Keefe Bruyette raised the firm's price target on Stellar Bancorp to $32 from $29 and keeps a Market Perform rating on the shares.
About STEL
Stellar Bancorp, Inc. is a bank holding company. Through its wholly owned subsidiary, Stellar Bank (the Bank), the Company provides a diversified range of commercial banking services primarily to small-to-medium-sized businesses, professionals and individual customers within its markets. The Company offers a range of commercial and retail lending services, including commercial loans, loans to small businesses guaranteed by the small business administration (the SBA), mortgage loans, home equity loans, personal loans and automobile loans, among others. The types of deposit accounts that the Company offers are typical of most commercial banks and consist of checking accounts, commercial accounts, money market accounts, savings accounts and other time deposits of various types and terms. The Company operates over 54 full-service banking centers, with 37 banking centers in the Houston region, 16 banking centers in the Beaumont region and one banking center in Dallas, Texas.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
