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Tuesday, DA Davidson revised its price target for Community West Bancshares (NASDAQ:CWBC) stock, lowering it to $22.00 from the previous $24.00, yet maintained a Buy rating on the shares. Currently trading at $16.25, near its 52-week low of $15.57, the stock has seen a YTD decline of 17%. The firm’s analysts cited a stable top line revenue for CWBC, supported by solid net interest margin (NIM) expansion, and a stable balance sheet. InvestingPro data reveals impressive revenue growth of 18.6% over the last twelve months.
The adjustment in the price target follows CWBC’s tempered loan growth expectations, which have shifted from the previously anticipated mid to high single-digit range. This change is attributed to the current economic uncertainty and the company’s strategic shift toward more proactive credit management practices. Despite these challenges, the company has maintained its dividend payments for 14 consecutive years, currently offering a 3% yield. InvestingPro subscribers can access additional insights through exclusive ProTips about the company’s profitability and growth prospects.
DA Davidson’s analysts highlighted the company’s efforts to navigate the challenging economic landscape by focusing on maintaining a solid NIM and a stable financial position. These measures are seen as crucial for CWBC’s performance amidst the broader economic pressures.
The analysts also noted the importance of the company’s decision to adjust its loan growth outlook, considering the potential impact of economic fluctuations on the banking sector. This prudent approach towards credit management is intended to safeguard the company’s financial health.
In conclusion, while DA Davidson has reduced its price target for Community West Bancshares, the firm continues to see the value in the company’s stock, as evidenced by the maintained Buy rating. With a market capitalization of $310 million and a P/E ratio of 36, InvestingPro analysis suggests the stock is currently trading above its Fair Value. The new price target reflects the current economic conditions and the company’s conservative strategy in response to these challenges.
In other recent news, Community West Bancshares reported its first quarter earnings for 2025, with an earnings per share (EPS) of $0.44. After adjustments for merger charges and other nonrecurring expenses, Piper Sandler calculated a core EPS of $0.46, which was $0.05 below their estimate but $0.04 above the consensus from other analysts. Both Piper Sandler and Keefe, Bruyette & Woods have adjusted their price targets for the bank to $19.00, with Piper Sandler maintaining an Overweight rating and Keefe, Bruyette & Woods holding a Market Perform rating. Meanwhile, Raymond (NSE:RYMD) James also maintained a Market Perform rating, noting the bank’s solid loan growth and improved net interest margin.
The bank’s recent merger with Central Valley Community Bancorp (NASDAQ:CVCY) has resulted in cost savings, and the company is focusing on controlling expenses for future positive operating leverage. In executive news, Community West Bank appointed Hinson M. Thomas as the new Executive Vice President and Chief Credit Officer. Thomas brings over three decades of experience in credit risk management and commercial banking. Prior to this, Chief Credit Officer Patrick A. Luis resigned, effective February 28, 2025, with no disagreements cited regarding the bank’s operations or policies. The company has reported this change to the SEC as part of its regulatory obligations.
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