Farmers & Merchants price target lowered to $26.50 from $27.50 at Piper Sandler

Piper Sandler lowered the firm’s price target on Farmers & Merchants to $26.50 from $27.50 and keeps a Neutral rating on the shares. The firm notes the company reported a solid Q1 EPS beat as a strong job in lowering funding costs paved the way for meaningful net interest margin expansion and an improved net interest income picture. Farmers & Merchants trades at a 2 multiple premium on forward earnings versus peers, and although profitability is improving, it remains slightly below peer levels. Piper sees limited room for multiple expansion and instead expects the company to grow into its valuation over time.