Western Alliance Bancorp drew reward Thursday for its discounted worth and “strong earnings engine” as monetary advisor Hovde Group initiated protection of the beaten-down financial institution inventory with an outperform ranking.
Western Alliance Bancorp inventory
WAL,
drew a worth goal of $65 a share. The inventory closed at $31.91 a share on Wednesday in an unsightly day for financial institution shares, which have been hard-hit within the wake of the Silicon Valley Bank’s demise earlier this month.
Hovde Group analyst Ben Gerlinger mentioned the financial institution gives a robust enterprise at a superb worth.
“While the market continues to digest the recent banking turmoil, we find WAL’s liquidity stance more than ample to cover any presumed ‘deposit flight’,” Gerlinger mentioned. “Even with our late-stage economic outlook, concerns around commercial real estate, and the assumption of a more pronounced deposit beta in 1Q, we find the core earnings too robust to pass up at today’s prices.”
As the Phoenix-based financial institution continues to seize market share and develop deposits, the outcomes will doubtless quell investor considerations, he mentioned.
“We believe first-quarter results are likely to reinforce the strong balance sheet positioning and prove limited deposit flight,” Gerlinger mentioned.
The touch upon Western Alliance Bancorp got here after the corporate on Friday mentioned deposit outflows after Silicon Valley Bank was taken over by the FDIC had fallen sharply and that it was seeing “significant inflows and new account openings.”
It additionally disclosed that 55% of its deposits are insured by Federal Deposit Insurance Corp., with $20 billion of accessible liquidity.
MarketWatch Deep Dive columnist Philip van Doorn listed Western Alliance in a rating of ban shares by upside potential implied by consensus worth targets.
See: 24 financial institution shares that contrarian bottom-feeders can feast on now
Source web site: www.marketwatch.com
