First Hawaiian stock rating downgraded by Barclays on limited growth outlook

Investing.com - Barclays (LON:BARC) downgraded First Hawaiian (NASDAQ:FHB) from Equalweight to Underweight on Tuesday, while lowering its price target to $25.00 from $27.00. The $3.3 billion market cap bank, currently trading at 14.18x earnings with a 3.96% dividend yield, has maintained consistent dividend payments for 10 consecutive years according to InvestingPro data.

The downgrade comes as investor focus shifts from safe havens to growth opportunities, with Barclays citing First Hawaiian’s limited geographic diversity compared to other mid-cap bank peers.

The bank’s loan growth depends heavily on Hawaii’s GDP, which is significantly tied to tourism, leading Barclays to project overall growth will be limited to the low single-digit range.

Barclays expects First Hawaiian may experience slower earnings growth and tangible book value (TBV) expansion due to a potentially disproportionate decline in tourism compared to national GDP during recessionary periods.

While Barclays believes First Hawaiian will maintain its price-to-tangible book value premium, the firm sees limited potential for valuation and price expansion from current levels.

In other recent news, First Hawaiian Inc . reported its first-quarter 2025 earnings, surpassing Wall Street expectations. The company achieved an earnings per share (EPS) of $0.47, exceeding the forecasted $0.4556, while revenue came in at $211 million, slightly above the anticipated $210.29 million. This performance indicates robust financial strategies and operational efficiencies. The bank’s net interest income rose to $160.5 million, marking an increase of $1.8 million from the previous quarter, with a net interest margin improvement of 5 basis points. Despite economic uncertainties, First Hawaiian maintained stable non-interest income at $50.5 million. The company continues to focus on operational efficiency and plans to invest in technology to enhance customer service. Analysts from Raymond (NSE:RYMD) James and Barclays have been actively engaging with the company to discuss the impacts of tariffs and the economic outlook. First Hawaiian remains cautiously optimistic about future economic challenges, projecting low to mid-single-digit loan growth.

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