PGC
Peapack-Gladstone ($PGC) President Makes 'Contrarian Buy' After Earnings-Driven Plunge...Trading at P/E 14x
07/24/2025 20:40
Sentiment
C-Level
Summary
- Peapack-Gladstone Financial ($PGC) President Douglas Kennedy purchased 3,720 shares at $26.24 on July 23rd.
- The purchase came after shares dropped from low-$30s to mid-$20s following Q2 earnings miss, signaling management confidence.
- Trading at P/E 14x and P/B 0.74x, below sector averages, with analyst price targets of $34-36.
POSITIVE
- President's well-timed purchase signals management's view of undervaluation and long-term confidence
- Attractive valuation at P/E 14x and P/B 0.74x, significant discount to regional bank peers
- Strong growth momentum from New York expansion with 700+ new client relationships established
- Solid fundamentals with NIM improvement from 2.25% to 2.77% and 23.2% revenue growth
NEGATIVE
- Q2 EPS of $0.45 missed analyst expectations of $0.61 by 26%
- Asset quality concerns with non-performing assets rising to 1.60% and increased loan loss provisions
- Rising operating expenses from New York expansion creating ongoing margin pressure
- Stock down 19% year-to-date, significantly underperforming the broader market
Expert
From a regional banking perspective, Kennedy's purchase is a meaningful signal. Short-term earnings pressure from expansion costs represents growth investment, and profitability improvement is expected as New York market penetration materializes. Current valuation provides adequate safety margin relative to risks.
Previous Closing Price
$25.74
-0.44(1.68%)
Average Insider Trading Data Over the Past Year
$27.86
Purchase Average Price
$29.22
Sale Average Price
$391.05K
Purchase Amount
$2.21M
Sale Amount
Transaction related to News
Trading Date | Filing Date | Insider | Title | Type | Avg Price | Trans Value |
|---|---|---|---|---|---|---|
07/31/2025 | 07/31/2025 | Sale | $ |
Douglas Kennedy, President of Peapack-Gladstone Financial ($PGC), purchased 3,720 shares at $26.24 per share on July 23rd. This marks the first insider purchase by executives this year, occurring right after the stock plunged from the low-$30s to the mid-$20s following the Q2 earnings announcement. Peapack-Gladstone is a regional bank holding company headquartered in Bedminster, New Jersey. Founded in 1921, the company provides private banking, wealth management, and commercial banking services through Peapack Private Bank & Trust. Over the past two years, it has aggressively expanded into the New York metropolitan area, establishing over 700 new client relationships. Kennedy's purchase appears to be a rebuttal to excessive market concerns. While the company reported Q2 EPS of $0.45, missing analyst expectations of $0.61 by 26%, revenue surged 23.2% year-over-year to $69.74 million. Net interest margin also improved significantly from 2.25% to 2.77%. The earnings shortfall was primarily due to one-time expansion costs related to the New York market entry. Interestingly, three directors also made purchases in March at around $28 per share, totaling 10,316 shares. F. Duffield Meyercord bought 6,316 shares ($179,608), Edward A. Gramigna Jr. purchased 3,000 shares ($85,279), and Beth Welsh acquired 1,000 shares ($28,537). Kennedy's purchase at an even lower price suggests strengthened management confidence. $PGC's current valuation appears attractive. The P/E ratio of approximately 14x is significantly below the regional bank industry average of 19x. The P/B ratio of 0.74x also trades at a discount compared to the sector average of 1.2x. With institutional ownership at 73%, professional investor confidence remains intact. Particularly noteworthy is the company's growth momentum. Through its New York metropolitan expansion over the past two years, it has attracted $1.3 billion in new deposits and $464 million in loans. Assets under management total $12.3 billion, with the wealth management segment contributing approximately 23% of total revenue as a stable income source. Asset quality presents some concerns. Non-performing assets increased to 1.60% of total assets, and the allowance for credit losses rose to 1.40% of total loans. However, with Tier 1 leverage ratios of 9.99% for the bank and 8.94% for the holding company, the institution maintains adequate capital buffers to manage these risks. Analysts remain optimistic. Consensus price targets range from $34-36, implying 30-40% upside potential from current levels. Next year's EPS forecast of $4.04 represents 49% growth expectations. However, near-term headwinds from expansion costs and asset quality concerns may continue to pressure the stock. Investors should view Kennedy's purchase not merely as a positive signal, but consider it alongside the company's long-term growth strategy and current valuation. The key question is whether $PGC can achieve differentiated growth through its New York expansion while the regional banking sector faces broader challenges. At current price levels, the risk-reward profile appears favorable, but close monitoring of Q3 results and asset quality improvements will be essential.