Live Oak Bancshares Stock Drops 7% Following Analyst Target and Estimate Cuts
Live Oak Bancshares, Inc. (NYSE:LOB) shares declined 7.10% on Wednesday to close at 33.9 USD. The drop came after Piper Sandler lowered its price target on the digital small business lender to $38 from $46. The analyst maintained a Neutral rating on the stock.
The downward revision was driven by reduced earnings per share estimates ahead of the company's third-quarter financial results. The analyst lowered the third-quarter earnings forecast to $0.63 per share from $0.80. Full-year estimates were also adjusted, with the 2026 forecast falling to $2.80 from $3.01, and the 2027 forecast dropping to $3.80 from $4.04. These lower projections reflect expectations of higher loan-loss provisions. Additionally, the new $38 target represents a valuation of about 10 times the 2027 earnings estimate, down from 12 times, matching a contraction in peer multiples.
Investors should watch the upcoming third-quarter earnings release to see if the bank's actual loan-loss provisions align with these increased expectations. Today's sharp decline is notable because the stock typically experiences low volatility, having recorded only eight moves greater than 5% over the past year. The stock is currently trading nearly 22% below its 52-week high of $43.76, which it reached in August 2026.
Key points
- Live Oak Bancshares shares fell 7.10% to 33.9 USD on Wednesday.
- Piper Sandler lowered its price target on the stock to $38 from $46.
- Earnings estimates for the third quarter of 2026 were cut to $0.63 per share from $0.80.
- The reduced forecasts are driven by expectations of higher loan-loss provisions.
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Why is Live Oak Bancshares stock falling?
The stock declined after an analyst lowered its price target and cut earnings forecasts due to expectations of higher loan-loss provisions.
What are the new earnings estimates for Live Oak Bancshares?
The third-quarter estimate was cut to $0.63 per share, while the 2026 and 2027 full-year estimates were reduced to $2.80 and $3.80, respectively.
What is the new price target for LOB stock?
The price target was lowered to $38 from $46, which is about 10 times the 2027 earnings estimate.