In a report released today, Brandon Rud from Stephens maintained a Hold rating on Bridgewater Bancshares, with a price target of $20.00.
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Brandon Rud has given his Hold rating due to a combination of factors impacting Bridgewater Bancshares. The bank is well-positioned to benefit from lower short-term interest rates and a steepening yield curve, which could lead to higher consensus estimates if medium and long-term rates remain stable. However, the elevated commercial real estate (CRE) concentration ratio and a lower tangible common equity (TCE) ratio compared to peers may limit the potential for significant stock price appreciation.
Bridgewater has demonstrated strong loan growth, particularly in its multifamily lending vertical, and has been successful in gaining market share. The bank’s strategic focus on mergers and acquisitions presents opportunities for further expansion, although these activities could also introduce risks that may affect stock performance. As a result, Rud is adopting a cautious stance, monitoring for improvements in capital ratios, potential stock price declines due to M&A activities, or an increase in net interest margins before considering a more favorable rating.