Back in late September I thought that East West Bancorp (EWBC) was a great mid-cap bank not getting its due from the market. While even average bank stocks have run since then, East West’s better than 110% jump since that last article does make it a standout alongside what I believe are other differentiated growth stories among smaller banks like First Republic (FRC), Bank OZK (OZK), Pinnacle Financial (PNFP), and SVB Financial (SIVB).
I have significantly upgraded my earnings growth assumptions since then; in large part due to an improved credit and spread outlook, as well as improving economy, but also in part to a more aggressive approach on capital allocation (holding on to more capital to grow the business). That significantly boosts my long-term core earnings growth estimate (to the mid-to-high single-digits), but it’s hard to argue to that East West’s differentiated growth opportunities are going unappreciated today.
Read more here:
East West Bancorp Still A Great Mid-Cap Bank, But Priced More Like It
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