ConnectOne Bancorp, Inc. CNOB shares are trading higher on Wednesday.

Keefe, Bruyette & Woods analyst Tim Switzer upgraded the stock on Tuesday from Market Perform to Outperform and raised the price forecast from $31 to $32.

The analyst notes that the shares are trading at a notable discount to both peers and their historical medians, even though the company’s key metrics generally rank in the top quartile among SMID-cap banks. The bullish stance also reflects several potential catalysts this year that could drive the stock higher.

Switzer notes the key positives, including the accretion from the merger closure with The First of Long Island Corporation FLIC, organic net interest margin (NIM) expansion, improvement in CRE credit concerns, and benefits from additional Fed rate cuts.

CNOB ranks in the top decile of banks for PPNR/share and EPS growth through 2026 while generating an ROTCE above the peer median, adds the analyst.

The analyst notes that, during a meeting at KBW’s Financial Services Conference in February, the company’s management shared that the initial integration efforts for FLIC were progressing smoothly, expressing confidence in meeting or surpassing all initial targets.

Switzer expects CNOB to achieve CAGRs of +32% for PPNR/share and +33% for EPS from 2024 to 2026, both in the top decile of peers over that period.

Price Action: CNOB shares are up 3.41% at $24.54 at the last check Wednesday.

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