First Bancorp Puerto Rico (FBP – Research Report), the Financial sector company, was revisited by a Wall Street analyst today. Analyst Timur Braziler from Wells Fargo remains neutral on the stock and has a $16.00 price target.
Geoff Meacham has given his Hold rating due to a combination of factors impacting First Bancorp Puerto Rico. The financial institution has demonstrated consistent growth and has engaged in substantial share repurchases, which is commendable. However, Meacham notes that, despite these positive aspects, there may be more attractive investment opportunities within the same region. With the introduction of new tax incentives, First Bancorp is benefiting from a lower tax rate, which bolsters its earnings per share (EPS) projections for the upcoming years. This fiscal advantage is a result of the Act 60 tax incentives that permit broader deductions for companies promoting economic development in Puerto Rico.
Further analysis by Meacham indicates that while First Bancorp’s net interest income (NII) has slightly declined, the decrease was less than expected, and a larger balance sheet has helped mitigate the impact of a modest drop in net interest margin (NIM). Additionally, loan balances are growing, albeit at a pace that is expected to slow down in the future due to an anticipated deceleration in consumer demand. The bank’s strong capital position is evident from its continued share buybacks, and its tangible book value has seen significant growth. However, the current stock price reflects many of these positives, leading Meacham to maintain a Hold recommendation with a revised price target that suggests limited upside potential at the current valuation.
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Based on the recent corporate insider activity of 61 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of FBP in relation to earlier this year.
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First Bancorp Puerto Rico (FBP) Company Description:
First BanCorp (Puerto Rico) is a holding company, which engages in the provision of personal, commercial, and corporate banking services through its subsidiaries. It operates through the following segments: Commercial and Corporate Banking; Consumer (Retail) Banking; Mortgage Banking; Treasury and Investments; United States Operations; and Virgin Islands Operations. The Commercial and Corporate Banking segment consists of the company’s lending and other services for large customers represented by specialized and middle-market clients and the public sector. The Consumer (Retail) Banking segment includes consumer lending and deposit-taking activities conducted mainly through FirstBank’s branch network in Puerto Rico. The Mortgage Banking segment focuses on the origination, sale, and servicing of a variety of residential mortgage loan products and related hedging activities. The Treasury and Investments segment deals with treasury and investment management functions. The United States Operations segment represents all banking activities conducted by FirstBank on the United States mainland. The Virgin Islands Operations segment includes all banking activities conducted by FirstBank in the U.S. Virgin Islands and the British Virgin Islands. The company was founded on October 29, 1948 and is headquartered in San Juan, Puerto Rico.
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