Piper Sandler Downgrades Equity Bancshares (EQBK) to Neutral

Piper Sandler analyst Nathan Race downgraded Equity Bancshares (NYSE: EQBK) from Overweight to Neutral with a price target of $52.00 (from $60.00).

The analyst comments: “We downgrade EQBK to Neutral given uncertain timing around EQBK’s prospects to garner more of a peer-like valuation on forward earnings. While the recently announced Lincoln Bancorp acquisition is expected to drive stronger EPS growth next year, we believe the possibility exists for a more prolonged timeframe for EQBK to recoup some of the profitability dilution tied to this partnership. We acknowledge recent mgmt. commentary around EQBK’s pipeline strength and that loan portfolio churn/run-off at Lincoln should be less relative to EQBK’s other recent acquisitions; however, we prefer to take a wait-and-see approach on EQBK’s ability to consistently generate MSD loan growth. In our view, EQBK’s future organic loan growth trajectory will be a factor in eventually narrowing the current ~20 bps differential between its core and reported NIM. While mgmt. has a proven track-record for enhancing franchise value via disciplined M&A, we also prefer greater visibility of EQBK’s path to cross the $10B-in-asset threshold (~$9.1B pro forma with Lincoln). We nevertheless remain positive on EQBK’s prospects for greater NIM expansion with its asset sensitive B/S (+2.6%/-0.2% to NII with +/-100 bps rate change), longer-term M&A optionality and its various other attributes. We maintain our 2026E/2027E EPS at $5.15/$5.45, while our PT moves to $52 (- $8) based on 9.5x our 2027E (from 11.0x given above-described factors) and a moderate discount to peers (at 10.4x).”

For an analyst ratings summary and ratings history on Equity Bancshares click here. For more ratings news on Equity Bancshares click here.

Shares of Equity Bancshares closed at $47.48 yesterday.

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