Freedom Broker cuts Newtek Business Services stock price target on guidance withdrawal

Freedom Broker has lowered its price target on Newtek Business Services (NASDAQ:NEWT) stock from $18.00 to $16.00, while maintaining a Buy rating for the company. The stock is currently trading at $12.32, which is below the firm's Fair Value estimate of $15.65, indicating that the stock may be undervalued. The price adjustment comes after Newtek Business Services withdrew its 2026 guidance, citing uncertainty stemming from a long-term shift in its revenue mix.

The company reported second-quarter 2026 results that met its own guidance, with diluted earnings per share at $0.47 and total revenue of $75.1 million. Instead of selling loans on its balance sheet, Newtek Business Services plans to retain more of them, which will help stabilize its net interest income and support future growth.

The company aims to release updated guidance within a 45 to 60 day timeframe. Despite the lowered price target, Newtek Business Services remains attractive on valuation multiples, boasting a P/E ratio of 5.59 and a dividend yield of 6.16%. As investors and analysts keep a close eye on upcoming guidance updates, the company's strategic shift towards holding more SBA 7(a) loans could have implications for its short-term financial structure.