Harbor Capital Advisors Inc. Increases Stake in First Merchants Co. (NASDAQ:FRME)

Harbor Capital Advisors Inc. has increased its investment in First Merchants Co. (NASDAQ:FRME) by 5.8% during the third quarter of 2024. As per the company's recent filing with the SEC, it now holds 18,321 shares of First Merchants after acquiring an additional 1,010 shares in the quarter. The value of Harbor Capital Advisors' holdings in First Merchants amounted to $682,000 at the end of this reporting period.

Several other institutional investors have also adjusted their stakes in First Merchants recently. For instance, the State Board of Administration of Florida Retirement System boosted its position by 84.1% during the first quarter, resulting in ownership of 31,082 shares worth approximately $1,024,000 after adding 14,200 shares. Similarly, BNP PARIBAS ASSET MANAGEMENT Holding S.A. increased its position by 21.0%, now owning 154,379 shares valued at $5,388,000 after acquiring an additional 26,772 shares. Additionally, Empowered Funds LLC raised its stake by 40.7%, giving it ownership of 184,862 shares valued at $6,452,000 after purchasing 53,463 more shares in the same period.

Furthermore, First Merchants Corporation itself lifted its stake immensely in the second quarter by 457.3%, now holding 581,863 shares valued at $19,370,000 after a significant purchase of 477,462 shares. Mesirow Institutional Investment Management Inc. also entered into a new position in First Merchants during the second quarter, with a valuation of about $8,218,000. Overall, hedge funds and other institutional investors now hold around 73.92% of the company's stock.

New Price Targets Set by Analysts

Recently, various equity research analysts have provided their insights on First Merchants. Keefe, Bruyette & Woods reaffirmed an "outperform" rating with a target price set at $45.00 in a note dated August 28th. On the other hand, Piper Sandler lowered the price expectations for First Merchants from $50.00 to $47.00 while maintaining an “overweight” rating as of October 28th. Hovde Group initiated coverage of First Merchants, assigning a “market perform” rating with a target price of $38.00 in an August report. Additionally, Stephens modified its rating for First Merchants from “overweight” to “equal weight”, changing its price target from $45.00 to $38.00 on August 7th. Presently, three analysts have assigned a hold rating while three have given a buy rating, leading to an average rating of "Moderate Buy" and a consensus target price of $41.60 according to data from MarketBeat.com.

First Merchants Stock Analysis

As of Thursday, shares of First Merchants Co. (NASDAQ:FRME) opened at $43.41. The stock has shown fluctuations over the past year, with a low of $28.08 and a high of $43.51. The debt-to-equity ratio for First Merchants stands at 0.41, with a current ratio of 0.90 and a quick ratio of 0.89. The company's market capitalization is approximately $2.55 billion, accompanied by a price-to-earnings ratio of 14.33 and a beta of 1.01. The business exhibits a fifty-day moving average price of $37.27 and a 200-day moving average price of $35.79.

First Merchants recently disclosed its quarterly earnings on October 24th, reporting earnings per share (EPS) of $0.84, which fell short of analysts' consensus estimate of $0.90 by $0.06. In terms of revenue, the bank generated $265.95 million for the quarter, which significantly exceeded analysts' forecast of $160.55 million. The firm recorded a net margin of 16.94% alongside a return on equity of 8.94%. Comparing to the same quarter last year, the EPS was $0.94. Analysts predict that First Merchants Co. will achieve an average EPS of 3.38 for the current fiscal year.

Dividend Announcement from First Merchants

In addition to its earnings report, First Merchants has recently confirmed a quarterly dividend, which was distributed on September 20th. Shareholders who were on record as of September 6th received a dividend of $0.35 per share. The ex-dividend date was also September 6th. This results in an annualized dividend of $1.40, yielding a dividend yield of 3.23%. Currently, the company maintains a dividend payout ratio of 46.20%.

About First Merchants

First Merchants Corporation serves as the financial holding organization for First Merchants Bank, providing community banking services. Its offerings encompass a wide range of financial products, including time, savings, and demand deposits, as well as various types of loans such as consumer, commercial, agri-business, public finance, and real estate mortgage loans.

Conclusion

In conclusion, Harbor Capital Advisors Inc.'s increased stake in First Merchants Co. reflects growing confidence in the bank's prospects, amid broader positive changes in institutional investment. With favorable analyst ratings and a reasonable dividend return, First Merchants appears well-positioned moving forward.

Investment, Dividend, Analysis