Jefferies has begun coverage on East West Bancorp (EWBC, Financial), assigning it a Buy rating and setting a price target of $115. The firm has adopted a constructive view as it covers 32 regional and mid-cap banks. Factors such as anticipated loan growth recovery, potential net interest margin expansion, and strong credit metrics are expected to benefit these banks, despite ongoing tariff uncertainties. Moreover, banks like EWBC are seen as well-positioned due to their surplus capital, which can be leveraged strategically, and their appealing valuations.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 11 analysts, the average target price for East West Bancorp Inc (EWBC, Financial) is $100.91 with a high estimate of $112.00 and a low estimate of $89.00. The average target implies an upside of 6.96% from the current price of $94.34. More detailed estimate data can be found on the East West Bancorp Inc (EWBC) Forecast page.
Based on the consensus recommendation from 12 brokerage firms, East West Bancorp Inc's (EWBC, Financial) average brokerage recommendation is currently 2.0, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for East West Bancorp Inc (EWBC, Financial) in one year is $79.01, suggesting a downside of 16.25% from the current price of $94.34. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the East West Bancorp Inc (EWBC) Summary page.
EWBC Key Business Developments
Release Date: April 22, 2025
- Revenue: Record revenue reported for the first quarter.
- Loan Growth: End-of-period loans increased by 1% quarter over quarter to $54 billion.
- Fee Income: Increased by 8% quarter over quarter.
- Net Charge-Offs: Annualized net charge-offs totaled 12 basis points or $15 million.
- Nonperforming Assets Ratio: Decreased by 2 basis points to 24 basis points at quarter end.
- Return on Tangible Common Equity: Nearly 16% for the quarter.
- Return on Average Assets: 1.6% for the quarter.
- Net Interest Income: Increased by $12 million from Q4 to $600 million.
- Net Interest Margin: Increased by 11 basis points to 3.35%.
- Efficiency Ratio: 36.4% for the first quarter.
- Total Operating Expense: $236 million for the first quarter.
- Allowance for Credit Losses: Increased by $33 million to $735 million or 1.35% of total loans.
- Common Stock Repurchase: Approximately 920,000 shares repurchased for $85 million.
- Dividends: $85 million distributed to shareholders.
- CET1 Capital Ratio: 14.3%.
- Tangible Common Equity Ratio: 9.9%.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- East West Bancorp Inc (EWBC, Financial) reported another quarter of record revenue, with solid loan growth reaching a new record level of $54 billion.
- The company executed a successful Lunar New Year CD campaign, optimizing pricing and adding new customers.
- Fee income increased by 8%, driven by strong customer activity across various categories.
- Asset quality remained solid with a decrease in nonperforming assets ratio and low net charge-offs.
- The company maintained strong capital levels, with a CET1 capital ratio of 14.3% and a tangible common equity ratio of 9.9%.
Negative Points
- The criticized loans ratio increased during the quarter to 2.3% of loans, indicating some deterioration in loan quality.
- The special mention loans ratio increased by 8 basis points, and the classified loans ratio increased by 3 basis points.
- Economic uncertainty led to an increase in the allowance for credit losses, reflecting potential future risks.
- The company faces challenges from tariffs and economic uncertainty, which could impact future performance.
- Despite strong performance, there is caution regarding potential rate cuts and their impact on net interest income.
