Stock Price & Analysis

Based on the analysis of Banner Corp (BANR) stock, the current price stability, mixed analyst sentiment, and recent earnings performance suggest a hold position. While the stock shows resilience with a 3% yield and positive revenue growth, concerns about credit quality and margin compression warrant caution.

BANR stock is predicted to reach $76 by the end of 2025, supported by DA Davidson's price target and strong Q4 performance with net interest margin expansion and loan growth. The stock shows a 9.42% upside potential from current levels.

The S1 support level for BANR Stock is $62.22 ,The R1 resistant level for BANR Stock is $67.06.

As of the end of day on 2025-03-24, the price of BANR Stock was $66.02.

The target price for BANR Stock according to analyst rating is 77.00, with the highest price target at 81.00 and the lowest at 73.00. Analysts have a Moderate Buy rating on BANR Stock overall.

The market cap of BANR is $2.3B.

Analysis and Insights

Valuation Metrics:

Banner Corp (BANR) currently exhibits a P/E ratio of 21.3, which is higher than the industry average of 14.5, suggesting potential overvaluation. Additionally, the EV/EBITDA ratio of 12.8 is above the industry benchmark of 10.5, further indicating a premium valuation. The price-to-book (P/B) ratio of 1.8 also exceeds the industry average of 1.2, signaling that investors may be paying more for the stock relative to its book value.

Earnings and Revenue Growth:

Banner Corp reported Q4 2024 non-GAAP EPS of $1.33, beating expectations by $0.13, with revenue of $160.14 million, a 1.9% year-over-year increase. While the earnings beat is positive, the modest revenue growth and rising delinquencies in loans (0.40% in Q3 2024) raise concerns about future profitability and asset quality.

Dividend Yield and Payout Ratio:

The stock offers a dividend yield of 3.0%, which is attractive in the current interest rate environment. However, the payout ratio of 105% indicates that the company is paying out more in dividends than it earns, which may not be sustainable in the long term.

Credit Quality and Risks:

The increase in delinquent loans (0.40% in Q3 2024) and nonperforming assets (up $12 million) suggests potential credit quality challenges. While the company maintains strong core deposits (89% of total deposits), the rising delinquencies and moderate compression in net interest margin could impact future performance.

Analyst Sentiment:

Analysts have mixed views on BANR. DA Davidson raised the price target to $76 but maintains a Neutral rating, citing stable credit quality and organic growth opportunities. Stephens & Co. reiterated a Buy rating with a higher price target of $82, reflecting confidence in the company's operational performance.

Conclusion:

Based on the analysis, BANR appears overvalued due to its high valuation metrics, slow revenue growth, and rising credit risks. While the dividend yield is attractive, the high payout ratio and potential margin compression are concerns. Investors should exercise caution and consider waiting for a pullback or improved fundamentals before investing.

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Banner Corporation is a bank holding company for Banner Bank (the Bank). The Bank is a chartered commercial bank in the State of Washington. The Bank is a regional bank that offers a variety of commercial banking services and financial products to individuals, businesses and public sector entities in its primary market areas. The Banks primary business is that of traditional banking institutions, accepting deposits and originating loans in locations surrounding its offices in Washington, Oregon, California and Idaho. The Bank is also a participant in secondary loan markets, engaging in mortgage banking operations, through the origination and sale of one- to four-family and multifamily residential loans. Its lending activities include commercial business and commercial real estate loans, agriculture business loans, construction and land development loans, one- to four-family and multifamily residential loans, United States small business administration (SBA) loans and consumer loans.

The price prediction for BANR stock in 2030 is estimated to be between $70 and $90 per share. This forecast is based on the stock's current performance, market trends, and expected economic conditions. The stock is expected to show moderate growth due to its stability in the financial sector and potential increases in interest rates, which could positively impact the banking industry.

BANR has a total of 1966 employees.