South Plains Financial (NASDAQ: SPFI) announced the launch of a share repurchase program on February 23, 2023. The board of directors approved a plan to buy back $10 million worth of shares, indicating confidence in the company’s valuation. This buyback authorization allows for the reacquisition of up to 1.5% of its outstanding stock through open market purchases, a move that often suggests the board believes the stock is undervalued.
Market Analysts Respond
Several analysts have issued new ratings and price targets for South Plains Financial in the wake of this announcement. On December 12, 2022, Keefe, Bruyette & Woods raised their target price from $45.00 to $46.00, maintaining an “outperform” rating. Following suit, Raymond James Financial increased their price objective from $42.00 to $44.00 on January 7, 2023, also assigning an “outperform” rating.
On January 27, Piper Sandler reissued a “neutral” rating with a target price of $45.00, while Hovde Group lifted their target from $47.00 to $49.00 and maintained an “outperform” rating. On January 28, Zacks Research upgraded the stock from “hold” to “strong-buy.” Currently, according to MarketBeat.com, South Plains Financial holds an average rating of “Buy” with a target price of $46.00.
Recent Financial Performance
In its latest earnings report released on January 26, 2023, South Plains Financial reported earnings of $0.90 per share, surpassing analysts’ consensus estimate of $0.84 by $0.06. The company generated $53.88 million in revenue for the quarter, slightly below the expected $54.11 million. The firm showcased a return on equity of 12.75% and a net margin of 19.69%. Analysts project an earnings per share (EPS) of $2.85 for the ongoing fiscal year.
In addition to the buyback announcement, South Plains Financial declared a quarterly dividend of $0.17 per share, which was distributed on February 17, 2023. This dividend marks an increase from the previous quarterly payout of $0.16. The annualized dividend now stands at $0.68, yielding approximately 1.7%. The ex-dividend date was set for February 2, 2023, and the company’s dividend payout ratio is currently 19.77%.
South Plains Financial is a bank holding company headquartered in Lubbock, Texas. It operates as a full-service commercial bank, catering to individuals, small businesses, and agricultural clients with a range of banking solutions. The company’s principal subsidiary, South Plains Bank, is under regulatory oversight from the Federal Reserve and state banking authorities.
As South Plains Financial moves forward with its share buyback program, the financial community will be closely monitoring both the company’s stock performance and its ongoing financial health.
