Overview
Piper Sandler has moved Nicolet Bankshares (NIC) to an Overweight rating from Neutral and raised its price target to $185.00, up from $148.00. At the time of the firm’s update, the stock was trading at $153.50, a level Piper Sandler says implies about 20% upside to the newly set target.
Valuation and rationale
The firm highlighted what it sees as a relatively inexpensive valuation for Nicolet compared with the bank’s historical price-to-earnings premium. Piper Sandler expects underlying core results to reveal the value of the MOFG transaction, which was announced on October 23 and has since closed. In support of its view, the firm cited data showing Nicolet’s current P/E ratio at 14.93 and a low PEG ratio of 0.71 - figures it interprets as indicating the stock could be undervalued relative to projected growth.
Earnings revisions and modeling
Piper Sandler increased its operating earnings-per-share estimate for 2026 to $12.45, marking an 18% upward revision to reflect accretion from the MOFG acquisition, and also published a 2027 estimate of $14.20. The firm noted Nicolet’s recent profitability, pointing to diluted EPS of $9.78 over the last twelve months as a baseline for those projections. The new $185 price target is calculated using a 13.0 multiple on the 2027 estimate and is consistent with the upper range of Nicolet’s historically observed two-to-three times premium over peers.
Balance-sheet and market context
Piper Sandler additionally observed that Nicolet’s pro forma price-to-tangible book value is 2.4 times, placing it at the higher end of historical levels for the bank. The current price-to-book ratio stands at 1.79, and shares are trading close to a 52-week high of $159.15.
Performance targets and current metrics
The firm anticipates Nicolet will achieve roughly a 2.0% return on assets (ROA) and about an 18% return on tangible common equity (ROTCE) in the Upper Midwest following the integration of MOFG. By contrast, reported current metrics show ROA at 1.68% and return on common equity at 12%. Separately, InvestingPro rates Nicolet’s overall financial health as "GREAT," citing strong price momentum and profitability scores that the rating service says underpin the bank’s capacity to reach the stated targets.
Transaction details and scale
The merger with MidWestOne Financial Group materially expanded Nicolet’s footprint in the Midwest. The combination added approximately $6 billion in assets, bringing Nicolet’s total to about $15 billion. Pro forma loan balances rose to $11 billion and deposits to $13 billion, according to the information provided.
Peer activity and prior targets
Following a period of strong quarterly results, peer Keefe, Bruyette & Woods raised its price target for Nicolet to $170 and kept an Outperform rating. Piper Sandler’s prior public commentary had included a $148 target that referenced assumptions of a 1.8% ROA and a 19% ROTCE; the firm has now updated those projections in light of MOFG-related accretion and its revised modeling.
Recent results, disclosures and capital return
In the most recent quarter, Nicolet reported operating earnings of $2.73 per share, exceeding market expectations as a result of robust pre-provision net revenue and lower provisions. The company also corrected executive compensation figures tied to the MidWestOne transaction to ensure accurate disclosure in its Securities and Exchange Commission filings. Nicolet declared a quarterly cash dividend of $0.32 per share, payable December 15, 2025, to shareholders of record on December 8, 2025.
Implications
Piper Sandler’s upgrade and modeling revisions reflect the firm’s view that the MOFG acquisition will be accretive and that current valuation multiples leave room for upside relative to the firm’s 2027 earnings multiple. Market observers will likely track the bank’s ability to close the gap between existing returns and Piper Sandler’s targets, as well as the company’s execution on integration and accurate disclosure of compensation and other merger-related items.