Piper Sandler has adjusted its price target for OFG Bancorp (OFG, Financial), lowering it to $42 from the previous $44, while maintaining an Overweight rating on the stock. This adjustment follows OFG's recent performance, where it slightly missed Piper Sandler's expectations but slightly exceeded consensus forecasts.
The firm's analysis highlights management's optimistic outlook on the local economy, emphasizing a healthy pipeline of loans despite modest loan growth of 0.8%. Piper Sandler also points to OFG's strong profitability and solid capital reserves, suggesting these factors will continue to enable significant share buyback programs.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 4 analysts, the average target price for OFG Bancorp (OFG, Financial) is $46.38 with a high estimate of $53.50 and a low estimate of $42.00. The average target implies an upside of 26.05% from the current price of $36.79. More detailed estimate data can be found on the OFG Bancorp (OFG) Forecast page.
Based on the consensus recommendation from 4 brokerage firms, OFG Bancorp's (OFG, Financial) average brokerage recommendation is currently 2.3, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for OFG Bancorp (OFG, Financial) in one year is $36.62, suggesting a downside of 0.46% from the current price of $36.79. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the OFG Bancorp (OFG) Summary page.
OFG Key Business Developments
Release Date: April 23, 2025
- Earnings Per Share (Diluted): $1
- Core Revenues: $178 million
- Total Interest Income: $189 million
- Total Interest Expense: $40 million
- Total Banking and Financial Service Revenues: $29 million
- Noninterest Expense: $93.5 million
- Income Tax Expense: $13.9 million
- Tax Rate: 23.34%
- Tangible Book Value Per Share: $26.66
- Efficiency Ratio: 52.2%
- Return on Average Assets: 1.56%
- Return on Annual Common Equity: 15.28%
- Total Assets: $11.7 billion
- Average Loan Balances: $7.8 billion
- Loan Yield: 7.99%
- New Loan Origination: $559 million
- Average Core Deposits: $9.6 billion
- Core Deposit Costs: 1.42%
- Average Borrowings and Brokerage Deposits: $517 million
- Cash: $710.6 million
- Investments: $2.8 billion
- Net Interest Margin: 5.42%
- Net Charge-Offs: $20 million
- Provision for Credit Losses: $25.7 million
- Nonperforming Loan Rate: 1.11%
- CET1 Ratio: 14.27%
- Stockholders' Equity: $1.3 billion
- Tangible Common Equity Ratio: 10.30%
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- OFG Bancorp (OFG, Financial) reported a strong start to the year with solid overall performance, generating earnings per share diluted of $1.
- The company's Digital First strategy is driving innovation, with significant growth in digital enrollments and transactions.
- OFG Bancorp (OFG) launched three new digital tools, including an omnichannel online mobile app and Apple Pay, enhancing customer experience.
- The company increased its dividend by 20% and bought back $23.4 million of shares, supported by strong capital generation.
- Credit quality remains stable with a well-managed portfolio, and the company maintains a strong capital position with a CET1 ratio of 14.27%.
Negative Points
- Total interest income declined by $941,000 due to two fewer business days, negatively affecting interest income by $3 million.
- Total banking and financial service revenues decreased by $3.6 million, impacted by annual insurance fees and MSR valuation changes.
- Net charge-offs increased by $4.5 million, including a partial charge-off of a previously reserved commercial loan.
- The company faces higher levels of volatility due to macroeconomic and geopolitical events, which could impact economic conditions.
- The power grid in Puerto Rico remains fragile, with ongoing challenges in achieving sustainable and cheaper power solutions.
