Key insights
- UBS assumes coverage of Columbia Banking System (COLB) with a Neutral rating and a $30 price target, citing expected EPS decline due to lower purchase accounting accretion and a shrinking loan book. While the buyback program is a positive, the analyst believes it's already priced in. Limited catalysts are seen until EPS growth resumes in 2H26. Downside risks are more acute for 1Q26 due to lower PAA and reliance on wholesale funding.
UBS analyst Timur Braziler assumes coverage on Columbia Banking System (COLB) with a Neutral rating and a price target of $30.00 (from $33.00).
The analyst comments: "We see a combination of lower PAA and a shrinking loan book resulting in a -5.1% Y/Y reduction in EPS, among the highest in the group. Main positive is the magnitude of the buyback, but we believe that’s already priced in. Valuation is inexpensive, but we see few catalysts until EPS begins to grow again (ie 2H26). Assuming coverage at Neutral.
We assume coverage of COLB with a Neutral rating and $30 price target, representing 9.2x our FY27 EPS, a modest discount to the group given a slower earning growth rate. We see three factors driving share performance over the course of 2026, 1) the ability for loan production to offset what we expect to be growing payoffs ($2.8B of transactional loan payoffs/maturities in 2026 - 6% of loans), 2) purchase accounting volatility, and what impact higher rates may play on accelerated accretion, 3) the cadence and magnitude of buybacks. Downside risks more acute for 1Q26 as a combination of lower purchase accounting (PAA) and greater seasonal reliance on wholesale funding drive our -6% Q/Q NII decline (in-line with consensus)."