UPDATE: D.A. Davidson Raises PT on East West Bancorp on Good Market Position

In a report published Friday, D.A. Davidson analyst Gary P. Tenner reiterated a Neutral rating on East West Bancorp EWBC, and raised the price target from $29.50 to $33.00.

In the report, D.A. Davidson noted, “We believe EWBC is well-positioned to continue to generate an above-peer ROE (12.4% estimated in 2013) given expected stability in credit costs, strong loan growth supporting spread revenue, and capital management via buybacks and dividends. Our pretax income growth rate of 3% in 2013 is below our projected 11% EPS growth due to the benefits of the year-to-date stock buyback (8 million shares) and expected additional repurchases over the remainder of the year. Our $33 price target represents a 2.3x multiple on 2014E TBV, in line with the current 2.25x multiple on 2Q13 TBV of $13.55. Our 2014 P/E multiple of 15x is elevated as bank multiples have expanded with the market beginning to discount a higher rate environment although the impact to 2014 EPS will be modest, in our opinion.”

East West Bancorp closed on Thursday at $30.35.