UBS analysts raised their rating on East West Bancorp (NASDAQ:EWBC) to Buy from Neutral and increased their price target to $61.00 from $57.00.
The analysts mentioned that after reviewing the Q3/23 earnings, they see a slight upside to the 2024 projections compared to the consensus. They find the shares appealing, especially since they’re trading at a valuation 2x below the median SMID P/E.
The analysts anticipate the company will achieve a +1.60% ROA, notably higher than its peers. This strong performance will allow the company to capitalize on its significant capital position (CET1 around 200bps above its peers), enabling the bank to repurchase over 3% of its shares in the coming quarters. Additionally, it can do this while also growing its tangible book value per share (TBVPS) faster than its competitors.
The analysts believe this solid position will boost investor confidence in the company’s ability to consistently deliver robust results and defend its stock price.