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Barron's: Silicon Valley Bank's Stock Could Surge 25 Percent

Barron's: Silicon Valley Bank's Stock Could Surge 25 Percent
(DPC)

Sunday, 26 March 2017 03:13 PM

Shares of SVB Financial Group, the parent of Silicon Valley Bank, could rise 25 percent in the next year due to higher interest rates, lower taxes and a revived initial public offering market, according to Barron's.

Shares of Santa Clara, California-based SVB have risen 78 percent in the past year and are trading around $178.

SVB ranks as one of the most asset-sensitive banks in the country. That means its assets reprice more dramatically than its ultralow-interest-rate deposits. Because its business clients maintain large balances, Barron's reported.

In its latest earnings conference call, SVB CEO Greg Becker said, “It’s widely expected that corporate tax rates will fall and uncertain regulatory requirements impacting banks may be relaxed.”

At 40 percent, SVB has one of banking’s highest tax rates because most of its business is done in high-tax California and Massachusetts. Any changes in corporate tax rates are likely to be a big help to SVB’s bottom line.

“We believe there’s still more to come,” says David Long, an analyst at Raymond James who has a Strong Buy on the stock and a $224 price target that’s 25% above its $178 price.

“Silicon Valley is strategically positioned to grow even more from events now unfolding, such as rate hikes, lower corporate tax rates, and improvements in the initial-public-offering market.”

© 2019 Thomson/Reuters. All rights reserved.

   
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Shares of SVB Financial Group, the parent of Silicon Valley Bank, could rise 25 percent in the next year due to higher interest rates, lower taxes and a revived initial public offering market, according to Barron's.Shares of Santa Clara, California-based SVB have risen 78...
Silicon, Valley, Bank, Stock, Price
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2017-13-26
Sunday, 26 March 2017 03:13 PM
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