STEL Stock Forecast & Price Target

Stellar Bancorp Inc. is poised for positive financial performance, reflected by management's expectation for incremental quarterly net interest margin (NIM) gains in the latter half of 2025, targeting a medium-term core NIM of 4%, supported by potential Federal Reserve rate cuts. The bank has demonstrated significant core deposit growth, with 50% of net new deposits derived from new customers, indicating a strong influx of business and consumer confidence. Furthermore, loan originations reached $640 million, the highest since 2022, showcasing a balanced portfolio and a healthy pipeline that supports continued growth in the upcoming quarters.

Stellar Bancorp's net interest margin (NIM) has slightly declined to 4.18%, with core NIM dropping to 3.95% after excluding significant purchase accounting accretion, indicating weakened interest income generation. The ongoing accretion run-off is projected to further pressure overall earnings growth, suggesting limited potential for near-term financial improvement. Additionally, the lack of meaningful catalysts for earnings enhancement raises concerns about the company's growth trajectory moving forward.