Stephens Remains a Buy on Pacwest Bancorp (PACW)

By Jason Carr

In a report released today, Tyler Stafford from Stephens maintained a Buy rating on Pacwest Bancorp (PACWResearch Report), with a price target of $43. The company’s shares closed yesterday at $36.70.

Stafford noted:

“We believe investor expectations were low for PACW’s 2Q results given fears around muted loan growth and continued NIM pressures. While mixed, we thought the in-line results ($0.94) were overall OK. Although lower q/q, 3.5% LQA loan growth was slightly better than Street’s expectations; and we view the NIM to be a push, as (ex. elevated prepay fees) the core loan-deposit spread came in 1 bps better than we anticipated which, coupled with lower liquidity due to elevated securities sales ($980 mil.), drove a 3 bps core NIM beat but ultimately a $4.3 mil. core FTE NII miss. Credit results were fine, including elevated NCOs but lower NPLs and special mention loans. We have an Overweight rating given the above peer profitability profile (1.72% ROA in 2Q) and discounted valuation of 9.8x our 2020 EPS.”

According to TipRanks.com, Stafford is a 4-star analyst with an average return of 4.1% and a 50.3% success rate. Stafford covers the Financial sector, focusing on stocks such as Capstar Financial Holdings Inc, Carolina Financial Corporation, and Amerant Bancorp Inc. Class A.

Currently, the analyst consensus on Pacwest Bancorp is a Moderate Buy with an average price target of $42.33.

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Based on Pacwest Bancorp’s latest earnings release for the quarter ending March 31, the company reported a quarterly net profit of $111 million. In comparison, last year the company had a net profit of $114 million.

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PacWest Bancorp is a bank holding company that specializes in financial and banking solutions. Through the Pacific Western Bank, it offers commercial banking services, including real estate, construction, commercial loans, comprehensive deposit, and treasury management services to small and middle-market businesses.