Avidbank's valuation a 'compelling entry point' for investors — Stephens analyst

Initiation

Stephens analyst Andrew Terrell on Dec. 28 initiated coverage of San Jose, Calif.-based Avidbank Holdings Inc. with an "overweight" rating.

The analyst wrote that the company's current valuation of 1.16x tangible book value is "an overly compelling entry point."

Deployment of Avidbank's "sizable" excess liquidity should be a tailwind for net interest margin and net interest income, while its "well-above-peer" asset sensitivity profile combined with the analyst's outlook for low- to mid-teens loan growth expectations will drive above-peer net interest income and revenue growth, Terrell wrote.

Additionally, the company's recent expense actions should also drive improved efficiency and profitability, he wrote.

The analyst set a price target of $29 and operating earnings per share estimates of $2.13 and $2.65 for 2021 and 2022, respectively.