Buy Rating Affirmed on Wintrust Financial Amid Strong Loan Growth and Operating Leverage Potential

Analyst Ben Gerlinger from Citi maintained a Buy rating on Wintrust Financial (WTFC – Research Report) and decreased the price target to $113.00 from $115.00.

Ben Gerlinger has given his Buy rating due to a combination of factors related to Wintrust Financial’s future prospects and present financial health. His optimism is anchored by the expectation of robust loan growth, which is projected to surpass the upper end of the company’s guidance. Gerlinger anticipates an 11% increase in core loan growth, which he believes will significantly enhance the company’s net interest income (NII) and, more critically, its franchise value through market share expansion and Pre-Provision Net Revenue (PPNR) upside when the interest rate environment becomes more favorable to banks.

Moreover, despite lowering his expectations for the net interest margin (NIM) for 2024 and 2025 due to the competitive rate environment and deposit growth pressures, Gerlinger still sees a strong potential for operating leverage improvements. These could stem from a better-performing mortgage market, modest cost-saving synergies from mergers, and a more flexible balance sheet. Although the target price was slightly reduced to $113, reflecting a softer EPS outlook and less excess capital, the anticipated share price return stands at a compelling 16.1%, underpinning the Buy rating.

Gerlinger covers the Financial sector, focusing on stocks such as BankUnited, Texas Capital Bancshares, and Wintrust Financial. According to TipRanks, Gerlinger has an average return of 9.0% and a 52.63% success rate on recommended stocks.

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Wintrust Financial (WTFC) Company Description:

Wintrust Financial Corp. operates as a bank holding company, which engages in the provision of banking and financial services. It operates through the following segments: Community Banking, Specialty Finance, and Wealth Management. The Community Banking segment provides community-oriented, personal and commercial banking services to customers located in its market area. The Specialty Finance segment offers financing of insurance premiums for businesses and individuals; accounts receivable financing, value-added, out-sourced administrative services; and other specialty finance businesses. The Wealth Management segment offers wealth management services through Wintrust Investments, CTC, Great Lakes Advisors and CDEC; trust and investment services, tax-deferred like-kind exchange services, asset management, securities brokerage services and 401(k) and retirement plan services. The company was founded by Edward Joseph Wehmer on December 30, 1992 and is headquartered in Rosemont, IL.