Should You Buy First Merchants Corp (FRME) Today? Analysis, Price Targets, and 2026 Outlook.
Conclusion
Buy
Latest Price
39.060
1 Day change
0.36%
52 Week Range
45.620
Analysis Updated At
2026/01/28
Buy now (starter position) for a beginner, long-term investor with $50k–$100k. FRME is pulling back into a nearby support zone (~37.40) while the bigger-picture trend remains constructive (short/medium/long moving averages stacked bullish). Near-term momentum is soft (negative, worsening MACD), but the price is close enough to support that an impatient long-term buyer has a reasonable entry today. Best approach: start with a partial allocation now and add only if it holds the 37.40–36.70 support area.
Technical Analysis
Trend/price action: FRME closed at 37.84 (-0.86%), below the pivot (38.572) and sitting just above S1 (37.397). This is a mild pullback toward support rather than a confirmed breakdown.
Momentum: MACD histogram is negative (-0.0453) and negatively expanding, implying weakening near-term momentum. RSI(6) at ~43 is neutral-to-soft (not oversold).
Moving averages: Bullish MA stack (SMA_5 > SMA_20 > SMA_200) supports a longer-term uptrend despite the short-term dip.
Levels: Support 37.40 (S1) then 36.67 (S2). Resistance 38.57 (pivot) then 39.75 (R1). A reclaim of 38.57 would improve the near-term setup; a loss of 37.40 raises risk of a move toward 36.67.
Intellectia Proprietary Trading Signals
- [AI Stock Picker](module://ai_stock_pick): No signal on given stock today.
- [SwingMax](module://swingmax): No signal on given stock today.
Options Data
Bullish
Open Interest Put-Call Ratio
Bullish
Option Volume Put-Call Ratio
Sentiment from options positioning is bullish-leaning on open interest (put/call OI ratio 0.2 = more calls than puts), but the tape is extremely quiet (0 volume reported), so it’s not a strong real-time sentiment read.
Implied volatility is elevated (30D IV ~61.67; IV percentile ~67.6), suggesting the market is pricing higher-than-normal uncertainty (often tied to earnings/events). With thin volume and higher IV, options data is more useful as a risk/uncertainty flag than a clean directional signal.
Technical Summary
Sell
2
Buy
8
Positive Catalysts
Business growth signals in Q4 2025: loan growth (+$197M) and deposit growth (+$424.9M) indicate continuing balance-sheet expansion.
Acquisition catalyst: imminent closing of First Savings Group acquisition, expected to add ~$2.4B in assets—potential scale and earnings power over time if integration goes well.
Noninterest income outlook: management planning for ~10% growth in noninterest income in 2026 (could diversify earnings beyond spread income).
Neutral/Negative Catalysts
Profitability pressure: Q4 2025 net income down ~11.40% YoY and EPS down ~10% YoY, indicating margin/expense/credit-cycle headwinds.
Expense growth outlook: management guided to +3% to +5% noninterest expense growth in 2026, which can cap earnings growth if revenue doesn’t keep pace.
Technical momentum is currently weakening (MACD negative and worsening), increasing the chance of near-term chop before any sustained rebound.
Financial Performance
Latest quarter: 2025/Q4. Revenue increased to ~$158.9M (+11.09% YoY), but profitability declined: net income ~$56.6M (-11.40% YoY) and EPS $0.99 (-10% YoY). This mix suggests FRME is still growing, but near-term earnings power is under pressure (expenses, funding costs, credit normalization, or integration-related factors). Loan and deposit growth were strong in the quarter, which is supportive longer term if credit quality holds.
Growth
Profitability
Efficiency
Analyst Ratings and Price Target Trends
No analyst rating/price-target trend data was provided, so changes in Wall Street ratings/targets cannot be confirmed here. From the information available, the 'pro' view would focus on balance-sheet growth and the acquisition adding assets/scale; the 'con' view would focus on the YoY earnings decline, higher uncertainty signaled by elevated IV, and integration/expense pressures. Politicians/Influential trading: no recent congress trading data available; hedge funds and insiders are reported as neutral with no significant recent trend.
Wall Street analysts forecast FRME stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for FRME is 48 USD with a low forecast of 46 USD and a high forecast of 50 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 FRME stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for FRME is 48 USD with a low forecast of 46 USD and a high forecast of 50 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 Buy
0 Hold
0 Sell
Moderate Buy
Current: 38.920
Low
46
Averages
48
High
50
Current: 38.920
Low
46
Averages
48
High
50
Piper Sandler
Overweight
downgrade
$48 -> $46
AI Analysis
2025-10-27
Reason
Piper Sandler
Price Target
$48 -> $46
AI Analysis
2025-10-27
downgrade
Overweight
Reason
Piper Sandler lowered the firm's price target on First Merchants to $46 from $48 and keeps an Overweight rating on the shares. Following solid Q3 results with in-line PPNR and improved credit metrics, the firm believes First Merchants remains well-positioned to generate price-to-earnings expansion above peers.
Raymond James
Raymond James
Outperform -> Market Perform
downgrade
2025-09-26
Reason
Raymond James
Raymond James
Price Target
2025-09-26
downgrade
Outperform -> Market Perform
Reason
Raymond James downgraded First Merchants to Market Perform from Outperform without a price target following the announcement to acquire First Savings Financial. While the deal creates entry into Louisville and boosts earnings forecasts, First Merchants' use of capital lessens the likelihood of share repurchases and material securities restructurings near-term, the analyst tells investors in a research note. In addition, the bank's core net interest margin faces some headwinds with lower rates, adds Raymond James.
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