What Happened?
Shares of regional banking company First Financial Bancorp (NASDAQ: FFBC) jumped 2.8% in the afternoon session after Truist Securities raised its price target on the stock to $29 from $28, reflecting the company's planned acquisition of BankFinancial. While the firm maintained its "Hold" rating, the higher price target was based on integrating the BankFinancial deal into its financial model. The acquisition was expected to close in the fourth quarter of 2025. Truist also increased its 2026 adjusted earnings per share forecast for First Financial by 3% to $3.20. This improved earnings outlook was attributed to expected cost savings and accounting adjustments related to the purchase.
After the initial pop the shares cooled down to $26.16, up 2.6% from previous close.
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What Is The Market Telling Us
First Financial Bancorp’s shares are not very volatile and have only had 6 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 15 days ago when the stock gained 2.9% on the news that investors scooped up equities, shaking off the initial concerns inferred from the Fed's dot plot, with tech stocks leading the charge.
As a reminder, the Federal Reserve cut its benchmark interest rate by 25 basis points the previous day and signaled that more reductions could come before year-end and beyond. Initially when the cut was announced and Fed Chair Powell held his press conference, there was a pullback in the market as the Fed's "dot plot" revealed that only one cut was likely for 2026. This was below the three cuts that had been priced into the markets. This was the first interest rate cut of 2025, a move investors had widely anticipated. In response to the decision, stocks rose significantly, positioning major indexes like the S&P 500 and Nasdaq to open at record levels.
The Fed's decision was influenced by signs of a weakening labor market. Lower interest rates are generally seen as positive for stocks because they reduce borrowing costs for businesses and make fixed-income investments like bonds less attractive by comparison, driving capital into the equity market. While Fed Chair Powell noted the path forward has risks, the prospect of looser monetary policy has fueled optimism on Wall Street.
First Financial Bancorp is down 1.2% since the beginning of the year, and at $26.16 per share, it is trading 13.8% below its 52-week high of $30.34 from November 2024. Investors who bought $1,000 worth of First Financial Bancorp’s shares 5 years ago would now be looking at an investment worth $1,995.
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