Smartfinancial Receives Bullish Rating Upgrade from Piper Sandler

Piper Sandler's Stephen Scouten upgraded their rating on Smartfinancial (NYSE: SMBK) from Hold to Strong Buy on 2024/04/24. The analyst also raised their price target by 4% from $25 to $26.

Scouten's price target hike followed an assessment of Smartfinancial's 2024/04/22-dated Q1 2024 earnings report. The analyst said they are slightly more bullish about the company in spite of decreasing projections following the quarterly report. Factors cited for their optimistic view included strong growth, the deposit mix outperforming expectations, and net interest margin trending upward.

"With a forward revenue forecast that could exceed estimates and a share price that is 96% of tangible book value, Piper Sandler expressed an optimistic outlook on the stock," Scouten noted.

For Q1 2024, Smartfinancial reported earnings per share (EPS) of $0.49, which beat the Zacks Consensus Estimate of $0.41 but missed Q1 2023's $0.68 by 27.8%. The company also reported revenue of $40.1 million, beating the Zacks Consensus Estimate of $39 million but missing Q1 2023's $42.9 million by 6.5%.

In the banking sector, it is common for management to not provide financial guidance in press releases or earnings calls, and Smartfinancial followed this practice. However, President and CEO Billy Carroll expressed his satisfaction with the company's performance in Q1 2024, stating, "Our company started 2024 with nice momentum. Q1 was highlighted by continued growth in both loans and deposits, along with expense discipline and focus on operating leverage improvement. The investments we've made over the last few years have positioned us well, and with a margin inflection point on the horizon, we remain very bullish."

While Scouten expressed confidence in Smartfinancial, Keefe, Bruyette & Woods's Catherine Mealor took a more cautious stance. On the same day as Scouten's upgrade, Mealor lowered their price target on SMBK by -7.7%, from $26 to $24, and maintained a Hold rating on the stock.

Currently, 80% of top-rated analysts rate SMBK as either a Strong Buy or Buy, while 20% see it as a Hold. There are no analysts recommending or strongly recommending selling the stock.

Since Smartfinancial's Q1 2024 earnings report on 2024/04/22, the stock has risen by 5.7%. However, on a year-over-year basis, the stock is down 4.2%. During this period, SMBK has underperformed the S&P 500, which has seen a decline of 22.6%.

Piper Sandler analyst Stephen Scouten is ranked in the top 15% of Wall Street analysts by WallStreetZen, with an average return of 10.6% and a win rate of 57.1%. Scouten specializes in the Financial Services sector.

SmartFinancial, Inc. operates as the bank holding company for SmartBank, providing various financial services to individuals and corporate customers. The company operates through several segments, including Commercial Real Estate, Consumer Real Estate, Construction and Land Development, Commercial and Industrial, and Consumer and Other. SmartFinancial offers a range of banking services, from checking and savings accounts to loans and wealth management. As of March 1, 2022, the company had 41 full-service branches and 2 loan production offices in East and Middle Tennessee, Alabama, and the Florida Panhandle. SmartFinancial is headquartered in Knoxville, Tennessee.

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