Stevens raised East West Bancorp target price

Source: Investing Posted 24/10/2024, 14:23

Stevens Financial Services has raised its East West Bankcorp (NASDAQ: EWBC) price target to SAR 104.00, up from the previous SAR 91.00. The adjustment came after East West Bankcorp reported third-quarter operating earnings per share of £2.14, beating Stevens’ estimate of £2.08 and consensus estimates of £2.06.

The Bank’s Net Profit Provisions (PPNR), excluding amortization.

showed a 4.5% increase which is attributable to exceeding net interest income (NII) by 2.3%, exceeding fee income by 3.2%.

and exceeding core expenses by 1.2%. Analysts had expressed concerns before the earnings announcement that East West Bankcorp could face a greater mismatch between deposit and asset repricing than its peers.

However, the third-quarter results showed a better-than-expected repricing pace.

both in the third quarter and so far in the fourth quarter.

as well as stronger-than-expected balance sheet growth. This led to the reaffirmation of the company’s guidance on net interest income.

East West Bankcorp has made great strides in its financial performance. The company’s earnings report for the third quarter of 2024 showed an operating earnings per share of SAR 2.09.

beating Bank of America estimates and consensus.

This impressive performance led to Bank of America Securities retaining East West Bankcorp’s “buy” rating.

with the price target raised to 110ریال from 99ریال. The adjusted target price is based on high earnings estimates for the fourth quarter of 2024 and the full fiscal year 2025.

reflecting a more flexible net interest margin and slightly improved fee revenue growth expectations.

In addition, East West Bancorp CEO Dominic Ng reported net income of 299 million riyals.

or 2.14 riyals per diluted share. in the third quarter earnings call.

recording a 1% increase in average loans quarter-on-quarter and a 3% rise in average deposits.

These latest developments also include an increase of 20 million riyals (4%) in the bank’s net interest income from the previous quarter and a record fee income of 81 million riyals, up 6% quarter-on-quarter. The bank expects annual loan growth of 2% to 4% and a corresponding decline in net interest income.

East West Bank Corp continues to navigate effectively in the current economic landscape, prioritizing long-term stability and shareholder value. East West Bankcorp recent performance is in line with many of Investing’s metrics and advice.

providing additional context for Stevens’ positive outlook.

A bank’s P/E ratio of 11.42 indicates that it may be undervalued relative to its profits.

which may support a price increase target. This is further enhanced by the company’s strong financial health.

as evidenced by it for profitable during the past twelve months and analysts’ forecast of profitability for the current year.

Investing tips highlight that East West Bankcorp has raised dividends for 6 consecutive years and maintained dividend payments for 26 consecutive years.

demonstrating a commitment to shareholder returns. The current dividend yield stands at 2.3%, and the dividend has grown by an impressive 14.58% in the past twelve months.

The bank’s recent performance is also reflected in its behavior in the market.

with Investing data showing a strong overall price return of 88.04% over the past year and trading at 96.64% from a 52-week high. These metrics align with Investing’s advice indicating a strong return over the past month and trading near a 52-week high.