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Tuesday, Western Alliance Bancorporation (NYSE:WAL) shares maintained their Buy rating as DA Davidson reiterated their stance, with the firm’s analyst Gary P. Tenner upholding a $106.00 price target. According to InvestingPro data, the stock appears undervalued, trading at an attractive P/E ratio of 8.9x with a market capitalization of $7 billion. Tenner’s assessment followed the company’s recent financial outcomes, which aligned with expectations despite a sequential decline in net interest income (NII) and a drop in fee income. The bank’s non-interest expenses (NIE) decreased, primarily due to lower costs associated with earnings credit rate (ECR)-related deposits.
The analyst pointed out that the reduced provisions for credit losses were noteworthy, especially considering the quarter-over-quarter rise in classified loan levels. However, non-performing assets (NPAs) saw a decline. This aspect of Western Alliance’s financials may attract investor attention during the earnings call amid broader economic concerns. InvestingPro analysis reveals that while 5 analysts have recently revised their earnings downward, the company maintains profitability with a return on equity of 13%.
Western Alliance’s guidance for 2025 experienced only a minor adjustment, with a slight increase in the NIE outlook, which is still expected to be flat or lower year-over-year. This update is anticipated to bolster future expectations for the bank. Tenner noted that while the guidance remains mostly unchanged, the provision levels for credit losses could serve as a potential variable in the company’s financial strategy moving forward. For deeper insights into Western Alliance’s financial health and growth prospects, including 8 additional exclusive ProTips, access the comprehensive Pro Research Report available on InvestingPro.
In other recent news, Western Alliance Bancorporation reported its first quarter 2025 financial results, which showed mixed performance. The bank’s revenue fell short of expectations, coming in at $778 million compared to the consensus forecast of $791.05 million. Despite the revenue miss, earnings per share were $1.79, aligning with analyst estimates. Net income saw a rise to $199.1 million, up 12.2% from the same period last year. The company’s net interest margin declined slightly to 3.47% from 3.60% a year ago. Total (EPA:TTEF) deposits increased by 11.4% year-over-year to $69.3 billion, and loans held for investment grew by 8% to $54.8 billion. The bank’s efficiency ratio improved to 55.8% from 57.3% in the first quarter of 2024, and its tangible book value per share rose 14.4% year-over-year to $54.10. Western Alliance maintained strong capital levels, with a Common Equity Tier 1 ratio of 11.1% at the end of the quarter. These developments highlight the bank’s continued growth in its core lending and deposit businesses.
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