Stephens on Tuesday raised its price target for Lakeland Financial (NASDAQ:LKFN) to $66.00 from $64.00, while keeping an Equal Weight rating on the shares. The revised target implies only modest upside from the prevailing share price of $61.30, although InvestingPro's Fair Value assessment signals the stock may be trading below intrinsic value.
The price-target change follows Lakeland Financial's fourth-quarter 2025 results, in which the company reported earnings of $1.16 per share, a result that exceeded consensus estimates by 9.4%. The quarter featured favorable revenue trends, no loan loss provision recorded, and a lower tax rate, all of which supported the beat. Over the last twelve months the bank produced a diluted earnings per share of $4.01, and InvestingPro data shows two analysts have raised their earnings estimates for the upcoming period.
On key balance-sheet and margin metrics, Lakeland's net interest margin finished the period 2 basis points ahead of expectations. Period-end loan growth was reported at approximately a 10% annualized rate. The company also disclosed an $800,000 loan recovery in the fourth quarter, connected to a material net charge-off that occurred two quarters earlier.
Shareholder returns and capital management were notable in the quarter. Lakeland repurchased 308,000 shares, an action Stephens and the company attributed to strengthened capital levels and continued profitability. The bank posted a return on assets of 1.70% for the fourth quarter of 2025. InvestingPro data places Lakeland's trailing twelve-month return on assets at 1.51% and return on equity at 14%.
Stephens outlined the drivers behind its outlook, pointing to a healthy Indiana economy and the company's ongoing investments as catalysts for accelerating loan growth and expansion of net interest margin. Based on those expectations, Stephens projects net interest income could rise by 7.5% in 2026.
From an income and dividend perspective, Lakeland yields 3.39% at current levels and has a record of raising its dividend for 12 consecutive years. The combination of current yield and a history of annual increases presents both income and modest growth characteristics for investors focused on regional bank exposure.
Other recent developments
The company also reported an EPS of $1.03 in another reported period, a miss of one cent versus expectations. Management attributed the shortfall to a pre-provision net revenue miss driven primarily by higher expenses, including increased incentive accruals, though strong fee income helped offset some of the pressure.
Keefe, Bruyette & Woods (KBW) revised its price target for Lakeland to $66 from $68 and maintained a Market Perform rating, noting the earnings miss as a central factor in the adjustment.
Lakeland Financial announced a 4% increase in its quarterly cash dividend to $0.52 per share for the first quarter of 2026, up from $0.50 in 2025. That dividend is payable on February 5, 2026, to shareholders of record as of January 25, 2026.
In a management move, Lake City Bank, a Lakeland Financial subsidiary, promoted Donald J. Robinson-Gay to Executive Vice President, Chief Credit Officer. He will be responsible for managing the bank's loan portfolio and overseeing credit quality and policies.
Takeaways
Lakeland's latest quarter combined an earnings beat, improved margin performance and disciplined capital actions. The bank's buyback activity and dividend increase indicate management confidence in capital adequacy. Analyst adjustments to price targets and earnings reflect mixed near-term dynamics - clear strengths in net interest income and fee income alongside expense pressures in certain periods.