The Bancorp upgraded to Strong Buy from Outperform at Raymond James with a price target of $76, citing improved profitability and balance sheet de-risking.

Raymond James upgraded The Bancorp to Strong Buy from Outperform with a $76 price target. The firm believes the company's strategy to gain a greater share of wallet from fintech partners will improve its profitability profile and balance sheet de-risking as it remixes its loan portfolio.

Raymond James has upgraded The Bancorp (TBBK) to a Strong Buy rating with a price target of $76, up from $71 [1]. The upgrade follows a meeting with the company's management, during which The Bancorp outlined its strategy to gain a greater share of wallet from fintech partners, including Chime, PayPal (NASDAQ:PYPL), and Block [3]. Raymond James believes this initiative will significantly improve The Bancorp's profitability profile and balance sheet de-risking as it remixes its loan portfolio towards more credit sponsorship fintech loans [2].

The Bancorp's stock has shown strong momentum, with a 33.8% return over the past year, currently trading at $62.78 [3]. The firm's upgrade reflects confidence in The Bancorp's growth prospects, despite recent market volatility. Raymond James projects a 2025 ROAA of 2.6% and ROATCE of 30.2%, while also addressing concerns about the Real Estate Bridge Lending portfolio [3].

The Bancorp's recent earnings report showed mixed performance, with earnings per share (EPS) at $1.27, slightly below expectations, but revenue surpassing forecasts at $181.24 million [3]. This highlights strong business operations, although the stock experienced a notable decline in aftermarket trading.

The Bancorp's market capitalization stands at approximately $2.93 billion, with a trading volume suggesting active investor interest [2]. Raymond James views The Bancorp as a leader in the Banking-as-a-Service space with a competitive moat and strong regulatory framework, citing its attractive valuation and capital return plans, including $500 million in stock repurchases planned over the next 18 months [3].

References:
[1] https://www.tipranks.com/news/the-fly/the-bancorp-upgraded-to-strong-buy-from-outperform-at-raymond-james-thefly
[2] https://site.financialmodelingprep.com/market-news/the-bancorp-tbbk-strong-buy-rating-raymond-james
[3] https://www.investing.com/news/analyst-ratings/raymond-james-upgrades-bancorp-stock-rating-to-strong-buy-on-fintech-growth-93CH-4181958