Stellar Bancorp, Inc. (NYSE:STEL) Annual Results Just Came Out: Here's What Analysts Are Forecasting For This Year

Stellar Bancorp, Inc. (NYSE:STEL) has just released its annual results, and analysts are already buzzing with their forecasts for the coming year. The company reported net income of $117.6 million, or diluted earnings per share of $2.20, for the full year 2024, marking a decrease of -9.88% compared to the previous year's $130.5 million. Despite the decline, analysts remain optimistic about Stellar Bancorp's prospects, with an average target price of $28.33, which is a decrease of -0.25% from the current stock price of $28.40.



Analysts' forecasts for Stellar Bancorp's revenue and EPS growth trends suggest a mixed outlook for the company. The average target price of $28.33, along with the low estimate of $27 and the high estimate of $29, indicates a range of potential price movements, with some analysts being more optimistic about the company's prospects. However, the average target price predicts a decrease of -0.25% from the current stock price, suggesting a neutral to slightly bearish outlook on the company's stock performance.



Analysts' expectations for Stellar Bancorp's net interest margin and non-interest income in the coming year are driven by several key factors. The decrease in the net interest margin from the prior year was primarily due to the impact of increased average interest-bearing liabilities and increased rates on interest-bearing liabilities, partially offset by increased rates on interest-earning assets. The analysts expect this trend to be partially offset by increased rates on interest-earning assets, which could help stabilize or even improve the NIM in the coming year. Additionally, the decrease in non-interest income in 2024 compared to 2023 was primarily due to a decrease in debit card and ATM income, partially offset by the increase in gains on sales of assets and Small Business Investment Company income recognized in 2024 compared to 2023.



Analysts' price targets for Stellar Bancorp reflect a mixed valuation relative to its peers in the banking sector. The company's forward P/E ratio of 12.85 is slightly lower than the industry average of 13.73, as of December 31, 2024, suggesting that analysts may view Stellar Bancorp as relatively undervalued compared to its peers. Additionally, Stellar Bancorp's forward price-to-book ratio of 1.28 is also lower than the industry average of 1.37, further indicating that the company may be undervalued based on this metric.



In conclusion, analysts' forecasts for Stellar Bancorp's annual results suggest a mixed outlook for the company, with a neutral to slightly bearish outlook on the company's stock performance. However, the company's valuation metrics relative to its peers in the banking sector indicate that analysts may view Stellar Bancorp as relatively undervalued. As investors, it is essential to conduct a thorough analysis of the company's fundamentals and compare it to its peers to make an informed investment decision. Keep an eye on Stellar Bancorp's upcoming earnings releases and any other relevant news to stay up-to-date on the company's performance and prospects.