Public Employees Retirement System Cuts Stake in East West Bancorp

Public Employees Retirement System of Ohio has significantly reduced its investment in East West Bancorp, Inc. (NASDAQ:EWBC) by 51.0% during the second quarter of 2023. According to its latest Form 13F filing with the Securities and Exchange Commission, the retirement system now holds 45,624 shares of the financial services provider after selling 47,508 shares in that period. As of this filing, the value of its remaining shares was approximately $4,607,000.

A number of other institutional investors and hedge funds have also adjusted their stakes in East West Bancorp recently. Notably, Picton Mahoney Asset Management increased its position by an impressive 1,971.4% during the first quarter, acquiring 290 shares valued at $26,000. Meanwhile, WPG Advisers LLC and SVB Wealth LLC established new positions in the company worth approximately $28,000 and $29,000, respectively, during the same timeframe. Ransom Advisory Ltd raised its stake by 60.0% in the second quarter, now owning 400 shares valued at $40,000.

As of now, institutional investors and hedge funds own approximately 89.53% of East West Bancorp’s stock.

Market Performance and Financial Overview

On August 29, 2023, East West Bancorp’s stock opened at $106.58. The company boasts a market capitalization of $14.69 billion and reported a price-to-earnings (P/E) ratio of 12.45. The stock’s performance has shown fluctuations, with a one-year low of $68.27 and a high of $113.95. The firm maintains a debt-to-equity ratio of 0.43, alongside a current ratio and quick ratio both standing at 0.89.

In its most recent quarterly earnings report, released on July 22, 2023, East West Bancorp announced earnings of $2.28 per share, surpassing analysts’ consensus estimates of $2.23 by $0.05. The company generated revenue of $705.00 million for the quarter, exceeding the expected $702.04 million. This marked a year-over-year revenue increase of 10.3%, compared to $2.07 earnings per share during the same quarter last year. Analysts predict that East West Bancorp will post $8.85 earnings per share for the current fiscal year.

Dividends and Analyst Ratings

East West Bancorp has declared a quarterly dividend of $0.60, which was paid out on August 15, 2023. This dividend yields approximately 2.3% on an annualized basis, with a payout ratio of 28.04%. Shareholders of record on August 4, 2023, received this distribution, with the ex-dividend date also falling on the same day.

Recent analyses from various research firms indicate a mixed outlook for East West Bancorp. Piper Sandler raised its price target from $100.00 to $104.00 while maintaining a “neutral” rating. Conversely, Wall Street Zen downgraded the stock from a “hold” rating to a “sell” rating. Morgan Stanley increased its price target from $111.00 to $126.00, assigning an “underperform” rating. Wells Fargo & Company set a new price objective of $125.00 with an “overweight” rating. TD Cowen initiated coverage with a “buy” rating and a target of $139.00.

As it stands, eleven analysts have rated East West Bancorp with a “buy,” four have given a “hold,” and one has issued a “sell” recommendation, leading to an average rating of “Moderate Buy” with a price target of $120.53.

In corporate governance news, East West Bancorp’s Executive Vice President, Gary Teo, sold 6,550 shares on August 27, 2023, at an average price of $106.47, totaling approximately $697,378.50. Following this transaction, he holds 12,235 shares valued at around $1,302,660.45. Additionally, Director Jack C. Liu divested 1,000 shares on August 22, 2023, for a total of $105,000.00.

Insider trading activity reflects a broader trend, with insiders selling 70,240 shares totaling approximately $7,379,678 over the past 90 days. Currently, company insiders hold 1.04% of East West Bancorp’s stock.

East West Bancorp, Inc. functions as the bank holding company for East West Bank, providing a range of personal and commercial banking services across the United States. The company operates through three primary segments: Consumer and Business Banking, Commercial Banking, and Other Services.