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On Tuesday, Keefe, Bruyette & Woods analysts reiterated their Outperform rating on East West Bancorp (NASDAQ:EWBC) stock, maintaining a price target of $110.00. The analysts highlighted the company’s revenue growth expectations and its management of tariff risks.
East West Bancorp, listed on NASDAQ as EWBC and currently valued at $13.11 billion, now anticipates its fiscal year 2025 revenue growth to exceed 6%, aligning with the consensus estimate of approximately 7%. According to InvestingPro data, the company’s actual revenue growth forecast stands at 18%, suggesting potential upside to current estimates. This projection follows strong first-quarter results, which are expected to continue into the second quarter.
The analysts noted that despite market concerns over tariffs, East West Bancorp appears to be managing these risks effectively. The company’s return on tangible common equity (ROTCE) is considered to be among the highest in its peer group, with a range of 15-16%. This strong performance is reflected in the company’s GREAT financial health score from InvestingPro, which evaluates multiple financial metrics including profitability and cash flow.
The unchanged net interest income guidance for fiscal year 2025 was initially seen as conservative, given the elevated tariff risks. However, with reduced uncertainty, East West Bancorp seems more confident in its revenue outlook.
The analysts maintain a positive outlook on East West Bancorp, citing its high-quality ROTCE, strong capital ratios, and reasonable valuation as key factors supporting their rating.
In other recent news, East West Bancorp reported a strong first quarter, achieving net income of $290 million and diluted earnings per share (EPS) of $2.08, surpassing analyst expectations of $2.05. The company’s revenue also exceeded projections, reaching $693 million compared to the anticipated $672.61 million. This performance was attributed to record levels of loans, revenue, and fee income, alongside a notable 16% return on average tangible common equity. Jefferies initiated coverage of East West Bancorp with a Buy rating, setting a price target of $115, highlighting the bank’s robust capital levels and potential for continued growth. The firm pointed to East West Bancorp’s strong capital ratios, including a Common Equity Tier 1 ratio of 14.3%, and projected a 12% annual growth in tangible book value over the next three years. Additionally, East West Bancorp’s strategic focus on optimizing deposit costs contributed to a net interest margin increase of 11 basis points. Analysts like Janney’s Timothy Coffey have adjusted growth estimates due to economic uncertainties but maintain a positive outlook on the bank’s performance. These recent developments underscore East West Bancorp’s ability to maintain strong financial results amidst a challenging economic landscape.
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