Hovde Group analyst Joseph Fenech upgraded First Internet Bancorp in a Jan. 14 note, writing that "[the] positive inflection point [is] not yet fully priced in." He also wrote that the bank could sell within the next few years.

The company's shares have underperformed in recent years due to net interest margin and capital level pressures, according to the analyst. But following positive 2019 third-quarter results and excess capital levels that drove down its tangible common equity ratio, the analyst believes the company is stabilizing.

Fenech also wrote that he "wouldn't dismiss the possibility of a sale" since the bank's technology platform could prove attractive to a larger company in need of a digital upgrade. At the same time, he noted that the deal talk was "purely speculation" and not incorporated in the new price target.

The analyst upgraded the company's stock rating to "outperform" from "market perform" and raised the price target to $29 from $24. His EPS estimates are $2.35 for 2019, $2.60 for 2020 and $3.00 for 2021.