Raymond James raised its 12-month price target on Independent Bank Corp (NASDAQ:INDB) to $94.00 from $84.00 while keeping a Strong Buy recommendation after the lender reported solid fourth-quarter 2025 results.
The brokerage firm attributed the higher target primarily to an expansion in core net interest margin. Raymond James said that margin improvement is positioned to continue, citing asset repricing and lower funding costs as the sustaining factors.
In its assessment, the research team emphasized that a combination of loan growth, ongoing share repurchases, and disciplined expense management should underpin meaningful earnings per share expansion at Independent Bank. Those operational levers, Raymond James argued, support the bank's forward earnings trajectory.
The firm also examined the stock's valuation versus peers. Raymond James noted that Independent Bank is trading at 10.8 times its 2026 estimated earnings, below a midcap peer multiple of 11.7 times, even though the bank has a strong earnings outlook and reported solid profitability. The firm highlighted a 14.7% return on tangible common equity as evidence of that profitability.
Deposits and franchise characteristics were flagged as further positives. Raymond James pointed to the bank's commercial deposit base, where 28% of deposits are non-interest bearing and 84% qualify as core deposits. The research note described Independent Bank as having a certain "scarcity value" within the New England midcap commercial banking franchise landscape.
Independent Bank's published fourth-quarter 2025 results show an adjusted operating earnings per share of $1.70, slightly above the $1.65 consensus that analysts had expected. Revenue for the quarter came in at $253.93 million, outpacing the $249.64 million forecast.
Despite beating expectations on both EPS and revenue, the stock declined in premarket trading. The market reaction underlines a disconnect between quarterly fundamentals and immediate investor sentiment.
Overall, Raymond James' update frames the bank's outlook around margin expansion, continued loan growth, capital returns, and cost control as the main drivers of future earnings. At the same time, the lower relative valuation compared with midcap peers was underscored as a notable feature of the current stock setup.
Key points
- Raymond James raised its INDB price target to $94 from $84 and retained a Strong Buy rating.
- Core net interest margin expansion, supported by asset repricing and lower funding costs, is the primary rationale for the target increase.
- Independent Bank beat Q4 2025 estimates with adjusted operating EPS of $1.70 and revenue of $253.93 million, yet shares fell in premarket trading.
Sectors impacted: Regional banking, financial services, and midcap bank equities.
Risks and uncertainties
- Market reaction: The stock fell in premarket trading despite the quarter beating expectations, indicating potential volatility in investor sentiment for regional banks and bank equities.
- Reliance on margin trends: Raymond James' thesis depends on continued net interest margin expansion through asset repricing and lower funding costs; shifts in those dynamics would affect earnings projections for the banking sector.
- Valuation gap persistence: Independent Bank is trading below midcap peers on 2026 earnings multiples, and that discount could persist if market perceptions do not change.
Conclusion
Raymond James' upgrade reflects confidence in Independent Bank's ability to translate margin improvement, loan growth, buybacks, and cost discipline into EPS growth. The bank's recent quarter reinforced that narrative with results above forecasts, even as near-term market reaction was negative.