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Investing.com - Citi has raised its price target on East West Bancorp (NASDAQ:EWBC) to $116.00 from $100.00 while maintaining a Buy rating on the stock. The bank, currently trading at $100.98 with a market cap of $13.92 billion, has demonstrated strong financial health, earning a "GREAT" rating according to InvestingPro metrics.
The price target increase reflects Citi’s confidence in East West Bancorp’s net interest income (NII) growth prospects, with the firm projecting approximately 8% growth in 2025, above the consensus estimate of around 7%. The bank has shown consistent strength in shareholder returns, maintaining dividend payments for 27 consecutive years with a current yield of 2.38%.
Citi analyst Benjamin Gerlinger noted that East West Bancorp’s own guidance suggests NII will trend above 6% in 2025, following updates provided at a recent industry conference.
The firm expects continuous net interest margin expansion throughout 2025, supported by both asset and liability repricing that should lead to higher net margin trends.
Citi’s revised price target is based on an updated discounted residual income model, with the firm citing East West Bancorp’s healthy capital base, diminishing headwinds from trade negotiation volatility, and continuation of healthy core loan growth as supporting factors.
In other recent news, East West Bancorp reported strong first-quarter results, with net income reaching $290 million and earnings per share (EPS) of $2.08, surpassing analyst expectations. The company reported record revenue of $693 million, exceeding the consensus estimate of $672.61 million, which highlights its robust financial performance. The bank’s return on tangible common equity was nearly 16%, and it experienced an 11 basis point increase in net interest margin due to deposit cost optimization. Jefferies initiated coverage of East West Bancorp with a Buy rating and set a price target of $115, citing the bank’s impressive capital ratios and potential for continued growth. Keefe, Bruyette & Woods reiterated their Outperform rating, maintaining a price target of $110, and noted the bank’s effective management of tariff risks. Analysts from Janney expressed confidence in East West Bancorp’s ability to manage external economic factors, such as tariffs, without significant impact on performance. The bank’s strong capital levels and diversified balance sheet position it well to support customers in various economic environments.
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