Keefe, Bruyette & Woods has lifted its price target for Peoples Bancorp (NASDAQ: PEBO) after the Ohio-based lender posted second-quarter earnings that surpassed analyst forecasts. The brokerage now sees upside in the stock, citing stronger net interest income and tighter expense management during the period ended June 30, 2026.
Peoples Bancorp reported earnings per share of $1.12, compared to the consensus estimate of $1.01. Net interest income rose 8% year-on-year, driven by higher loan yields and a stable deposit base. Provisions for credit losses fell, reflecting improved asset quality in its commercial and consumer portfolios.
Keefe Bruyette's revised price target of $38 per share, up from $35, suggests a potential total return of around 12% from current levels. The stock closed at $34.10 on Tuesday, up 1.8% on the day. The upgrade comes amid a mixed quarter for US regional banks, with many facing margin pressure from elevated funding costs.
For UK investors, the move is a reminder that select US mid-cap banks are still delivering operational improvements, even as the broader sector grapples with regulatory uncertainty. Peoples Bancorp's diversified revenue mix—spanning commercial lending, wealth management, and insurance—offers a contrast to the more interest-rate-sensitive giants.
Analysts caution that the stock remains tied to the health of the Ohio and West Virginia economies, where unemployment remains low but manufacturing activity has softened. The bank's loan book is heavily weighted toward small and medium-sized enterprises, which could face headwinds if the US economy slows later this year.
Keefe Bruyette maintained an 'outperform' rating, noting that management's cost-control initiatives and a conservative credit culture provide a buffer against potential downturns. The next catalyst will be third-quarter results, due in October, where investors will watch for loan growth momentum and net interest margin stability.