Now trading at a price of $55.09, East West Bancorp has moved 1.2% so far today.
East West Bancorp returned losses of -28.0% last year, with its stock price reaching a high of $80.98 and a low of $33.86. Over the same period, the stock underperformed the S&P 500 index by -32.0%. As of April 2023, the company's 50-day average price was $56.25. East West Bancorp, Inc. operates as the bank holding company for East West Bank that provides a range of personal and commercial banking services to businesses and individuals. Based in Pasadena, CA, the mid-cap Finance company has 3,200 full time employees. East West Bancorp has offered a 3.2% dividend yield over the last 12 months.
Overview of the Company's Finances:
| 2019-12-31 | 2020-12-31 | 2021-12-31 | 2022-12-31 | |
|---|---|---|---|---|
| Revenue (MM) | $1,663 | $1,599 | $1,801 | $2,319 |
| Interest Income (MM) | $1,468 | $1,377 | $1,532 | $2,046 |
| Net Margins | 40.53% | 35.5% | 48.46% | 48.64% |
| Net Income (MM) | $674 | $568 | $873 | $1,128 |
| Depreciation & Amort. (MM) | -$144 | -$120 | -$157 | -$160 |
| Earnings Per Share | $4.61 | $3.97 | $6.1 | $8.92 |
| EPS Growth | n/a | -13.88% | 53.65% | 46.23% |
| Diluted Shares (MM) | 146 | 143 | 143 | 141 |
| Free Cash Flow (MM) | $726 | $691 | $1,162 | $2,066 |
| Capital Expenditures (MM) | -$10 | -$3 | -$6 | n/a |
| Long Term Debt (MM) | $898 | $804 | $401 | $152 |
| Net Debt / EBITDA | -0.99 | -1.79 | -1.51 | -0.93 |
East West Bancorp benefits from growing revenues and a flat capital expenditure trend, strong net margins with a stable trend, and low leverage. The company's financial statements show a strong EPS growth trend and generally positive cash flows.
East West Bancorp Is Potentially Undervalued and Trades Below Its Graham Number:
East West Bancorp has a trailing twelve month P/E ratio of 6.3, compared to an average of 14.34 for the Finance sector. Based on its EPS guidance of $7.88, the company has a forward P/E ratio of 7.1. According to the 11.3% compound average growth rate of East West Bancorp's historical and projected earnings per share, the company's PEG ratio is 0.56. Taking the weighted average of the company's EPS CAGR and the broader market's 5-year projected EPS growth rate, we obtain a normalized growth rate of 8.8%. On this basis, the company's PEG ratio is 0.72. This suggests that its shares are undervalued. Additionally, the market is possibly undervaluing East West Bancorp in terms of its equity because its P/B ratio is 1.21 whereas the sector average is 1.57. The company's shares are currently trading -29.2% below their Graham number.
East West Bancorp Has an Average Rating of Buy:
The 11 analysts following East West Bancorp have set target prices ranging from $56.0 to $78.0 per share, for an average of $68.18 with a buy rating. As of April 2023, the company is trading -17.5% away from its average target price, indicating that there is an analyst consensus of some upside potential.
East West Bancorp has an average amount of shares sold short because 2.7% of the company's shares are sold short. Institutions own 91.0% of the company's shares, and the insider ownership rate stands at 0.95%, suggesting a small amount of insider investors. The largest shareholder is Vanguard Group Inc, whose 11% stake in the company is worth $827,922,105.
