MCB Stock Forecast & Price Target

Metropolitan Bank Holding is well positioned to perform in the current environment with its strong growth profile and double-digit loan growth projections for both 2024 and 2025. The bank has robust capital levels and a liability-sensitive balance sheet, which will benefit from any potential Fed rate cuts. Despite missing on core PPNR for Q4, management expects NIM to continue expanding and does not anticipate significant loss content from the recent multifamily loan issue. While the decision to fully exit its BaaS business may lead to lower earnings in the near term, it will reduce volatility and potential regulatory costs in the long term. Shares are currently trading at a discount to KRX peers and our revised price target of $66, representing 1.0x forward TBV, 10x 2024E, and 8x 2025E, provides significant upside potential.

Metropolitan Bank Holding is facing several headwinds, including increasing expense projections and a lower revenue outlook due to the one-time systems upgrade costs totaling $9.5mm and the exit of its B2C portion of its GPG business in 2024. These factors are expected to result in lower profitability for the bank. Additionally, the increasing credit costs and the overall challenging banking environment are likely to further pressure the bank's EPS, leading to downward revisions in the estimates. As such, the stock currently has a negative outlook due to these fundamental reasons.