In a report released on July 18, Manan Gosalia from Morgan Stanley maintained a Hold rating on Bank OZK, with a price target of $55.00.
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Manan Gosalia has given his Hold rating due to a combination of factors related to Bank OZK’s current performance and future prospects. The bank is effectively implementing its strategy focused on growth and diversification, which is reflected in its strong loan growth and increased net interest income (NII). However, while the 2Q25 operating earnings per share exceeded expectations, this was partially offset by rising expenses, which are anticipated to continue growing in line with the bank’s updated guidance.
Despite the positive momentum in non-RESG loan growth, there are concerns about potential headwinds from paydowns in the RESG portfolio as interest rates decrease. Additionally, while the bank has managed to reduce net charge-offs, it has also increased its reserves, indicating a cautious approach to credit risk. These mixed factors, including both positive growth indicators and rising costs, contribute to the Hold rating, suggesting that while there is potential for modest upside, the risks and expenses warrant a cautious stance.
In another report released on July 10, Wells Fargo also maintained a Hold rating on the stock with a $48.00 price target.