Positive Outlook for First Interstate BancSystem: Buy Rating Driven by Credit Improvement and Growth Potential

D.A. Davidson analyst Jeff Rulis has maintained their bullish stance on FIBK stock, giving a Buy rating on May 23.

Jeff Rulis has given his Buy rating due to a combination of factors that suggest a positive outlook for First Interstate BancSystem. The bank is expected to improve its credit situation, return to consistent organic growth, and avoid mergers and acquisitions, which are anticipated to enhance its profitability and operational consistency. These improvements are likely to be driven by the new CEO’s efforts to instill greater discipline within the organization.
Despite recent credit challenges, the base case scenario projects that criticized loan balances will decrease by year-end, with credit losses moderating and transitioning to growth in the coming years. The bull case envisions even more significant credit progress, leading to increased earnings per share and improved return metrics by 2026. Although there are risks, the downside is perceived as limited, while the potential upside is compelling, given that FIBK trades at a discount compared to its peers.

In another report released on May 23, Piper Sandler also maintained a Buy rating on the stock with a $38.00 price target.