Stephens has increased its price target for Peoples Financial Services Corp. (NASDAQ: PFIS) to $56.00, up from $50.00, while retaining an Equal Weight rating on the regional bank. The firm highlighted a mix of headwinds and positives in Peoples' fourth-quarter 2025 performance that underpinned its revised valuation.
The $552.7 million market cap lender is trading near its 52-week high of $56.87, and InvestingPro analysis included in the review suggests the shares remain undervalued against a Fair Value assessment.
On the downside, Stephens flagged an earnings per share miss tied to lower-than-expected pre-provision net revenue (PPNR). PPNR came in at $13.8 million for the quarter versus Stephens' estimate of $19.4 million. The firm said the shortfall was compounded by higher-than-anticipated operating expenses of $31.1 million and elevated charge-offs totaling $1.8 million.
Despite those headwinds, the bank posted some favorable results. Net interest margin (NIM) was stronger than projected at 3.60%, compared with Stephens' estimate of 3.51%. Balance-sheet momentum was also evident as loans rose 1.3% and deposits increased 3.4% quarter-over-quarter.
In response to the mix of outcomes, Stephens adjusted its forward earnings outlook. The analyst house raised its 2026 EPS estimate by 4% to $6.55 and lifted its 2027 EPS estimate by 3% to $7.65, citing higher NIM assumptions and lower provisioning expectations. Stephens' model anticipates returns on assets of roughly 1.25% in 2026 and about 1.35% in 2027.
Corporate actions and governance updates at Peoples were also disclosed. The board approved a 1.2% increase in the quarterly dividend, setting a first-quarter cash dividend of $0.6250 per share. That dividend is payable on March 13, 2026, to shareholders of record on February 27, 2026.
The company completed a repositioning of its bond portfolio, selling lower-yielding U.S. Treasury securities with a weighted average yield of 1.18%. The transaction generated an after-tax loss of approximately $1.85 million, which the company indicated will be reported in the fourth quarter of 2025. The repositioning totaled $78.6 million in proceeds.
Leadership change was announced as well: Peoples said its President, Thomas P. Tulaney, will retire on April 3, 2026. Tulaney, who has more than 40 years of banking experience, will remain with the company as a Senior Advisor to support the leadership transition.
Taken together, Stephens characterized the quarter as mixed - operational pressures and one-time items weighed on near-term earnings, while margin strength and balance-sheet growth allowed the firm to modestly lift multi-year earnings projections. The bank's dividend increase, bond-portfolio repositioning and the planned leadership transition were presented by the company as elements of ongoing strategic adjustments.
Contextual note - The article reports the analyst action, company financials, and corporate developments as disclosed. Where the original company statements or analyst notes are limited, this report reflects those disclosures without extrapolating beyond the provided information.