Excess liquidity continues to weigh on PacWest Bancorp’s (PACW) profitability, but management has made some strong moves to build the business toward even more long-term loan growth. Add more loan growth to an already-strong profitability story (one of the most profitable banks in its peer group), and you have a dramatically stronger long-term earnings story.
This significantly improved earnings outlook, not to mention a much better-than-feared credit migration through the COVID-19 pandemic, has driven very strong share price performance over the past year even with a recent pullback. Even with the strong move off of the pandemic bottoms, PacWest shares could still generate a double-digit annualized return from here on improving loan growth and the profit leverage that should produce.
Read the full article on Seeking Alpha:
PacWest Bancorp - Solid Outlook In Loan Growth Boosts Strong Profitability Story
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