RBC Capital upgraded East West Bancorp (EWBC
) to outperform from sector perform, after the company's first quarter results announcement.
Analyst Joe Morford says its 55 cents first quarter earnings per share (EPS) beat his estimate by 3 cents and the consensus by 2 cents. He notes that the upside stemmed from a number of factors, including roughly 2 cents of securities gains. He says that the margin drifted down just two basis points to 4.18%. He also notes accelerated loan growth, further fee gains, and significant improvement in credit. He raises his $2.25 2006 EPS estimate to $2.28 and his $2.60 2007 estimate to $2.62. He notes the recent pullback in shares, as well as his increased confidence in outlook for margin and loan growth. He maintains his $43 stock price target.