First Merchants price target raised to $50 from $41 at Piper Sandler

Piper Sandler raised the firm’s price target on First Merchants to $50 from $41 and keeps an Overweight rating on the shares. While elevated NCOs in Q2 were disappointing, the firm believes these were isolated, idiosyncratic events for First Merchants and future credit quality is likely to be a non-issue. As consistently more benign asset quality re-emerges, Piper thinks First Merchants should garner at least a peer-like forward price to earnings via its superior and high-quality organic balance sheet growth outlook and solid profitability profile that is generating greater excess capital flexibility to potentially continue to support greater returns to shareholders.