Financial services firm Piper Sandler has lowered its rating on FB Financial (NYSE: FBK) to Neutral from Overweight, while simultaneously elevating its price target to $65, up from a previous $63. This adjustment occurs as FB Financial's shares currently trade at $60.75, just slightly under their 52-week peak of $62.37.
The downgrade stems largely from concerns over the bank's valuation. Piper Sandler highlighted that much of the anticipated growth potential appears already priced into FB Financial's shares, aligning with the stock's substantial 26.09% increase in value over the last six months and a price-to-earnings ratio standing at 25.15. Correspondingly, InvestingPro’s proprietary Fair Value model estimates the stock as fairly priced in the marketplace.
In the fourth quarter of 2025, FB Financial posted what Piper Sandler described as another solid quarter, concluding an overall very strong fiscal year. Company leadership expressed positive views on expected trends extending into 2026 and subsequent years. The bank has delivered consistent profitability in the trailing twelve months period and has upheld a shareholder-friendly policy by raising its dividend annually for the past eight years. The current dividend yield stands at 1.25%.
Following the rating adjustment, Piper Sandler nevertheless raised its earnings per share projections to $4.88 for 2026 and $5.55 for 2027. This upward revision reflects expectations of an improving net interest margin environment. The newly established price target of $65 corresponds to roughly 13.5 times the firm’s 2026 earnings estimate, slightly higher than the prior multiple of approximately 13. This adjustment correlates with recent appreciation in bank sector stock valuations.
Separately, FB Financial’s Q4 2025 earnings report exceeded analyst forecasts. The company recorded adjusted earnings per share of $1.16, outpacing the anticipated $1.12. Revenue also topped estimates, reaching $178.6 million against the predicted $176.04 million.
Additionally, FB Financial declared an 11% increase in its quarterly cash dividend, now set at $0.21 per share compared with the previous $0.19. The dividend is scheduled for payment on February 24, 2026, to shareholders recorded as of February 10, 2026. These developments underscore FB Financial’s solid financial footing and its ongoing commitment to returning capital to investors.
Investment firm Piper Sandler has revised its outlook on FB Financial (NYSE: FBK) from Overweight to Neutral, citing valuation concerns despite the bank's robust recent performance. The price target was increased modestly to $65 from $63 as the stock nears its 52-week high. FB Financial has demonstrated strong earnings growth and consistent dividend increases, yet current market prices appear to reflect these fundamentals adequately.
Key Points
- Piper Sandler downgraded FB Financial's rating from Overweight to Neutral due to valuation concerns despite solid company performance.
- The stock is trading near its 52-week high with a P/E ratio of 25.15 and is considered fairly valued according to proprietary models.
- FB Financial reported better-than-expected Q4 2025 earnings and raised its dividend by 11%, reflecting consistent profitability and shareholder returns.
Risks
- The current share price appears to already reflect most of FB Financial's future growth prospects, limiting potential upside in equity valuation.
- Elevated P/E ratios suggest valuation risks in the banking sector that could affect investor sentiment and share price stability.
- Any adverse changes in net interest margins or earnings growth projections could impact the company's ability to sustain dividends and satisfy investor expectations.