On Wednesday, East West Bancorp (NASDAQ:EWBC) received a boost from Keefe, Bruyette & Woods as the firm increased its price target on the bank's shares to $85 from $82. The favorable adjustment comes on the heels of East West Bancorp's robust first-quarter performance, which surpassed expectations in terms of revenue and credit. Alongside the price target hike, the firm has reaffirmed its Outperform rating on the stock.
The analyst from Keefe, Bruyette & Woods cited East West Bancorp's solid first-quarter financial results as a key driver for the revised price target. The bank's impressive revenue and credit performance were complemented by a raised full-year 2024 net interest income (NII) outlook. According to the analyst, these factors are poised to bolster the stock, which is currently trading at an appealing price-to-earnings (P/E) multiple of 9x.
East West Bancorp's return on tangible common equity (ROTCE) stands out within its peer group, registering at 15.4% against a common equity tier 1 (CET1) ratio of 13.5%. The analyst's assessment points to this as a testament to the bank's high-quality financial standing, which is arguably among the best in its category.
The firm's outlook for East West Bancorp extends beyond the current year, with earnings estimates for 2024 and 2025 being raised by 4% and 3%, respectively. This revised projection underscores the firm's confidence in the bank's financial trajectory and its potential for continued growth.
InvestingPro Insights
Complementing the optimistic outlook from Keefe, Bruyette & Woods, InvestingPro data showcases East West Bancorp's financial robustness with a solid market capitalization of $10.54 billion and a price-to-earnings (P/E) ratio that remains attractive at 9.48. This is slightly improved when looking at the adjusted P/E ratio for the last twelve months as of Q1 2024, which stands at 9.38. Moreover, the company's commitment to shareholder returns is evident, as it has not only maintained dividend payments for 26 consecutive years but has also achieved a dividend growth of 14.58% in the last twelve months as of Q1 2024.
InvestingPro Tips further reveal that East West Bancorp has raised its dividend for six consecutive years, indicating a reliable income stream for investors. In addition, analysts have revised their earnings upwards for the upcoming period, reflecting a positive sentiment that aligns with the firm's forecast. For those interested in exploring more about East West Bancorp's financials, InvestingPro offers even more tips and metrics. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription and gain access to a total of 7 additional InvestingPro Tips to inform your investment decisions.
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