Analyst Confidence Holds Firm on Dime Community Bancshares Outlook

Shares of Dime Community Bancshares (DCOM) are attracting attention following a reiterated bullish stance from Wall Street. On Friday, the investment firm DA Davidson reaffirmed its 'Buy' rating and $36.00 per share price target for the regional bank. This assessment came after the firm's analysts held discussions with the company's management, gaining clarity on its profitability roadmap.

DA Davidson's latest research note points to several fundamental strengths, including a resilient net interest margin performance and a deliberate strategic pivot toward higher-yielding loan segments. The analysts express confidence in the bank's ability to significantly enhance its return on equity over the coming two-year period.

Despite this positive view, the firm adjusted its earnings projections downward. The 2026 earnings per share (EPS) estimate was reduced by $0.19 to $3.39, primarily attributed to anticipated higher provisions for credit losses. To maintain the $36 price objective, the analyst increased the underlying price-to-earnings (P/E) multiple from 10 to 11. This adjustment signals growing confidence in the quality and sustainability of the bank's earnings growth.

When trading concluded on Friday, DCOM stock was priced near $29.79. This suggests an approximate 20% upside to the analyst's stated target.

Should investors sell immediately? Or is it worth buying Dime Community Bancshares?

Navigating a Divergent Valuation Landscape

This vote of confidence arrives at a critical juncture as the bank steers through a challenging interest rate environment. The stock has recently rebounded from November lows around $27.00, even testing the $30 level in early December.

Valuation remains a central debate. While DA Davidson sees a path to $36.00, other analytical models present a more conservative picture. For instance, quantitative valuation models from Morningstar calculate a significantly lower fair value estimate of approximately $15.13. This stark contrast highlights the divergent methodologies and assumptions applied by different market observers.

Looking ahead, DA Davidson forecasts a marked improvement in key profitability metrics. The firm projects the return on equity will rise from a current level of about 0.41% to 1.29% by the fourth quarter of 2027. Achieving this optimization is contingent on the bank's continued success in expanding its deposit base and effectively rotating its portfolio toward more profitable commercial loans.

The next significant test for management's optimistic strategy will be the fourth-quarter financial results, scheduled for release in late January 2026.