Index falls as earnings results weigh; pound above $1.33, Bodycote soars
Investing.com - Keefe, Bruyette & Woods raised its price target on Cathay General Bancorp (NASDAQ:CATY) to $52.00 from $51.00 on Wednesday, while maintaining a Market Perform rating on the stock.
The increase follows stronger loan growth at the bank, which KBW noted had "picked up in a real way" at an 8% annualized rate for the quarter. This improvement prompted Cathay General to revise its loan growth guidance to 3-4%, up from its previous 1-4% range.
KBW cited the improved growth outlook as supporting better net interest income (NII) projections for 2026. The firm also factored in a lower tax rate due to California tax law changes when adjusting its estimates upward by 3-5% following the quarterly results.
The research firm observed that Cathay’s core pre-provision net revenue was in line with expectations, as better revenues from both net interest income and core fees were offset by higher expenses.
KBW maintained its Market Perform rating on Cathay General stock, but noted that an active share buyback program and a "somewhat discounted valuation" at 9.6 times 2026 estimated earnings and 1.3 times tangible book value could provide "some downside support" for the shares. The stock currently trades at a P/E ratio of 12.11x, and InvestingPro analysis suggests the stock is slightly overvalued at current levels. Subscribers can access additional insights and 6 more exclusive ProTips about CATY through the comprehensive Pro Research Report.
In other recent news, Cathay General Bancorp reported its financial results for the second quarter of 2025, with earnings per share (EPS) slightly surpassing expectations at $1.10 compared to the forecast of $1.09. However, the company did not meet its revenue forecast, although specific revenue figures were not disclosed. Additionally, DA Davidson raised its price target for Cathay General Bancorp to $51 from $45, maintaining a Neutral rating on the stock. The decision was influenced by the company’s solid quarter of net interest income growth and net interest margin expansion. These developments reflect a mix of positive earnings performance and cautious optimism from analysts regarding the company’s financial health.
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