Brean Capital launched coverage of First Financial Bankshares (NASDAQ:FFIN) on Tuesday, assigning a Neutral rating and setting a price objective of $36.00. The stock was quoted at $34.29 at the time of the note and has gained 15.63% so far this year. InvestingPro Fair Value metrics indicate the shares are trading below fair value under those measures.
In his initiation, analyst John Rodis published fiscal year earnings-per-share forecasts of $1.95 for FY26 and $2.07 for FY27. Those estimates sit slightly under current consensus figures, which are roughly $1.99 for FY26 and $2.11 for FY27. The company's prevailing price-to-earnings multiple is 19.35, a level Brean describes as a premium when weighed against near-term earnings growth potential.
Brean's $36 target is underpinned by two valuation assumptions. First, the firm expects First Financial to trade at approximately 320% of its current tangible book value. Second, the target implies a multiple of 18.5 times Brean's FY26 EPS projection. For context, Brean cites peer group medians of roughly 170% of tangible book and 11.3 times earnings. At present, First Financial's reported price-to-book ratio is 2.56 and the company has a market capitalization of $4.87 billion.
Brean noted that First Financial has historically attracted a valuation premium relative to its peer set, which the firm defines as banks with $10-20 billion in assets. Several attributes were highlighted as contributors to that premium. InvestingPro data referenced by Brean shows the company has made dividend payments for 34 consecutive years and has increased its dividend for 15 consecutive years. The broker also pointed to the bank's strong fundamentals and comparatively high profitability. Brean's model projects a FY26 return on assets of 1.82%, versus a peer-group median of around 1.24%.
InvestingPro figures cited in the initiation show the bank's current return on assets at 1.72% and a dividend yield of 2.2%. The InvestingPro data set is noted as containing additional financial health metrics available to subscribers, although those extra indicators were not detailed in Brean's note.
On the corporate governance front, First Financial Bank, a subsidiary of First Financial Bankshares, Inc., disclosed a set of executive-level promotions. James Alexander has been named Executive Vice President and Head of Commercial Banking, succeeding the role previously held by David Bailey. Bailey serves as President of both the company and the bank. Alexander originally joined First Financial in 2018 following the acquisition of Commercial State Bank in Kingwood, where he held the position of president. The firm characterized the promotion as part of an ongoing management succession plan intended to preserve continuity and effective leadership.
The initiation captures a mix of valuation questions and supportive operational signals. Brean's price target and the multiples it entails reflect an assumption that the market will continue to afford First Financial a material premium to tangible book and to peer earnings multiples, grounded in the bank's profitability profile and regional franchise. At the same time, the broker's EPS projections fall slightly below consensus, and the firm flags the bank's premium relative to peers as a distinguishing feature of the investment case.