Get 40% Off
🚨 Volatile Markets? Find Hidden Gems for Serious Outperformance
Find Stocks Now

Western Alliance shares target cut by KBW, retains outperform

EditorAhmed Abdulazez Abdulkadir
Published 04/22/2024, 11:14 PM

On Monday, Keefe, Bruyette & Woods (KBW) revised its price target for Western Alliance (NYSE:WAL) Bancorporation, listed on the New York Stock Exchange under the ticker NYSE:WAL. The firm's new price target is set at $74, down from the previous $79, while the Outperform rating for the bank remains unchanged.

The adjustment comes after Western Alliance's stock demonstrated resilience last Friday, with a 3.1% increase compared to the 1.9% rise in the Bank Index (BKX). Analysts at KBW noted this performance as a sign that the market is not solely focused on the bank's increased expense guide but is also considering the expected rise in net interest income (NII).

Despite a slight reduction in earnings per share (EPS) estimates, KBW expressed approval of the strategies Western Alliance is implementing to directly address the challenges of managing assets over $100 billion. The bank is expected to continue achieving returns above its peers, with a projected return on tangible common equity (ROTCE) of 15% for both 2024 and 2025.

The analysts reaffirmed their confidence in Western Alliance by reiterating the Outperform rating. They highlighted the bank's proactive approach to scaling its operations and financial performance, which they believe will lead to sustained high returns relative to its competitors.

This price target update reflects KBW's ongoing analysis of Western Alliance's financial trajectory in light of recent market movements and the bank's strategic initiatives. The firm's commentary underscores its positive outlook on the bank's potential to navigate the complexities of significant asset growth while maintaining profitability.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

InvestingPro Insights

As we delve into Western Alliance Bancorporation's market performance and future potential, it's crucial to consider the latest real-time data and insights. With a market capitalization of $6.32 billion and an attractive P/E ratio of 8.13, Western Alliance stands out in the financial sector. Adjusted figures from the last twelve months as of Q1 2024 show a slightly higher P/E ratio of 8.88, indicating a market that values the bank’s earnings growth prospects.

InvestingPro Tips highlight that Western Alliance has a commendable track record of raising its dividend for the past five years. This consistent dividend growth, coupled with a current yield of 2.58%, could be a reassuring sign for income-focused investors. Furthermore, analysts predict the company will remain profitable this year, which is supported by a solid operating income margin of 42.88% over the last twelve months.

While there are concerns about weak gross profit margins and downward earnings revisions by 8 analysts for the upcoming period, the substantial price uptick of 37.93% over the last six months suggests investor optimism. These insights, along with the fact that Western Alliance has been profitable over the last twelve months, provide a nuanced view for potential investors.

For those seeking a deeper analysis, additional InvestingPro Tips are available, offering a broader perspective on Western Alliance’s financial health and performance. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, and access the full suite of insights to make well-informed investment decisions.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.