What happened
Shares of Triumph Bancorp (TFIN -1.61%), a nearly $6 billion asset bank based in Dallas, Texas, traded more than 11% higher in the late morning Monday after an analyst upgraded its stock.
So what
Analysts at B. Riley Financial upgraded Triumph from a neutral rating to a buy rating today. Analysts at B. Riley also increased their price target from $85 per share to $110 per share, giving the stock potential upside of 34.7%.
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Other analysts have also been jumping on the bull train lately. Raymond James recently upgraded the stock and raised its price target to $111 per share, while Wells Fargo increased its price target from $42 per share to $73 per share.
Now what
Triumph Bancorp was one of the top-performing bank stocks in 2020, actually growing its earnings from 2019, which was rare in the industry. The bank did benefit from the mortgage boom, but is also a specialized lender in the transportation industry.
Triumph offers a lending product called factoring, which provides working capital to businesses by essentially using customer invoices as collateral. This specialized financial product comes with attractive returns.
Currently trading close to $91 per share, Triumph trades at an extremely high valuation of roughly 460% of tangible book value. But being in this niche lending business, it has an advantage over other banks, which is why I still like the company and agree with analysts.
