East West Bancorp (EWBC) AI Stock Analysis

• Market Cap: $10.25B
• Dividend Yield: 3.02%
• Average Volume (3M): 1.57M
• Price to Earnings (P/E): 8.9
• Beta (1Y): 1.18
• Revenue Growth: 13.84%
• EPS Growth: 2.04%
• Country: US
• Employees: 3,100
• Sector: Financial
• Sector Strength: 81
• Industry: Banks - Diversified
• EPS (TTM): 2.10
• Shares Outstanding: 137,801,450
• 10 Day Avg. Volume: 1,819,538
• 30 Day Avg. Volume: 1,572,929
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 5.11
• Price to Cash Flow (P/CF): 6.20
• P/FCF Ratio: 3.50
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $104.75
• Price Target Upside: 38.17% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9

East West Bancorp's overall score is driven by its strong financial performance and attractive valuation, suggesting potential for growth. However, technical analysis indicates bearish trends, and operational fluctuations pose risks. The company's record financial performance and strategic initiatives highlight its robust future, but caution is advised due to potential volatility.

Positive Factors

Deposit Costs

Deposit costs are coming down nicely, with a 50% spot beta as of Dec 31.

Loan Growth

East West Bancorp offers among the most compelling risk/rewards to investors looking to position for accelerating loan growth.

Revenue Growth

Management highlighted EWBC has been consistently growing wealth management, foreign exchange, and deposit account fees at over 20% per year and this strength should persist in 2025.

Negative Factors

Earnings Performance

Adjusted EPS of $2.08 missed MS/consensus estimates of $2.17/$2.11 on higher provisions and expenses.

Expense Guidance

Expense guide (ex amortization) of +7-9% y/y was higher than MS/consensus estimates, especially given the higher base after the 4Q24 miss.

Geopolitical Risks

Escalating tensions with China could serve as a source of idiosyncratic headline risk.

East West Bancorp Business Overview & Revenue Model

Company Description

East West Bancorp, Inc. operates as the bank holding company for East West Bank that provides a range of personal and commercial banking services to businesses and individuals. It operates through three segments: Consumer and Business Banking, Commercial Banking, and Other. The company accepts various deposit products, such as personal and business checking and savings accounts, money market, and time deposits. Its loan products include mortgage and home equity, commercial and residential real estate, working capital lines of credit, construction, trade finance, letters of credit, commercial business, affordable housing loans, asset-based lending, asset-backed finance, project finance, and equipment financing, as well as financing services to clients needing a financial bridge to facilitate their business transactions between the United States and China. The company also provides various wealth management, treasury management, foreign exchange, and interest rate and commodity risk hedging services; and mobile and online banking services. As of January 27, 2022, it operated approximately 120 locations in the United States and China; full-service branches in Hong Kong, Shanghai, Shantou, and Shenzhen; and representative offices in Beijing, Chongqing, Guangzhou, Taipei, and Xiamen. East West Bancorp, Inc. was incorporated in 1998 and is headquartered in Pasadena, California.

How the Company Makes Money

East West Bancorp generates revenue primarily through the interest income from its lending operations, which include commercial loans, residential mortgage loans, and consumer loans. The company also earns money from non-interest income sources such as fees and service charges related to deposit accounts, wealth management services, and international banking transactions. Additionally, East West Bancorp benefits from its strategic positioning in cross-border banking, leveraging its expertise and network to facilitate trade and investment flows between the United States and Greater China, which significantly contributes to its earnings. Key revenue factors include net interest margin, loan portfolio growth, and fee-based income.

East West Bancorp Financial Statement Overview

Summary

East West Bancorp demonstrates strong profitability and financial stability, supported by effective cost management and prudent leverage. However, recent operational and cash flow fluctuations pose some risks.

Income Statement

East West Bancorp's income statement reveals mixed results. The gross profit margin remains high consistently with strong net income figures, reflecting effective cost control and profitability. However, the EBIT margin for 2024 is negative due to a significant drop in EBIT, indicating potential operational challenges. Revenue growth has been volatile, with a decline observed in 2024. Overall, profitability is strong, but operational issues are a concern.

Balance Sheet

The balance sheet exhibits a solid equity base with a healthy return on equity. The debt-to-equity ratio is favorable, reflecting prudent leverage management. The equity ratio shows a stable position, though slight fluctuations are noted. Strong stockholders' equity and manageable debt levels highlight financial stability, though attention should be paid to recent asset trends.

Cash Flow

East West Bancorp's cash flow statements show robustness in operating cash flow relative to net income, indicating strong cash generation capabilities. However, free cash flow growth has been inconsistent, with a notable decline in 2024. The company's ability to convert earnings into cash flows is generally positive, but recent fluctuations suggest potential cash management concerns.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
335.22M	2.36B	2.32B	1.80B	1.60B
	Gross Profit
335.22M	3.97B	2.32B	1.80B	1.60B
	EBIT
-568.61M	1.75B	1.69B	1.06B	685.76M
	EBITDA
0.00	1.62B	1.57B	1.21B	805.67M
	Net Income Common Stockholders
1.17B	1.16B	1.13B	872.98M	567.80M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
360.73M	4.61B	9.66B	14.61B	10.37B
	Total Assets
75.98B	69.61B	64.11B	60.87B	52.16B
	Total Debt
125.24M	4.76B	264.33M	506.86M	928.19M
	Net Debt
-235.50M	140.38M	-3.36B	-4.14B	-3.90B
	Total Liabilities
68.25B	62.66B	58.13B	55.03B	46.89B
	Stockholders Equity
7.72B	6.95B	5.98B	5.84B	5.27B
Cash Flow		Free Cash Flow
1.41B	1.42B	2.07B	1.16B	690.67M
	Operating Cash Flow
1.41B	1.42B	2.07B	1.17B	693.33M
	Investing Cash Flow
3.06M	-4.25B	-4.58B	-9.12B	-6.85B
	Financing Cash Flow
-579.97M	3.96B	2.11B	7.84B	6.91B

East West Bancorp Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 75.81
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EWBC, the sentiment is Negative. The current price of 75.81 is below the 20-day moving average (MA) of 83.20, below the 50-day MA of 89.47, and below the 200-day MA of 89.60, indicating a bearish trend. The MACD of -4.92 indicates Positive momentum. The RSI at 39.00 is Neutral, neither overbought nor oversold. The STOCH value of 23.44 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for EWBC.

East West Bancorp Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BCS	81 Outperform	$48.30B	7.57	9.14%	2.99%	8.58%	35.39%
NWG	77 Outperform	$45.53B	8.49	13.34%	4.49%	18.85%	14.85%
ING	75 Outperform	$55.88B	8.51	12.75%	5.56%	4.07%	9.97%
NU	75 Outperform	$50.92B	26.29	28.07%	―	47.34%	89.96%
NTB	74 Outperform	$1.71B	7.59	21.37%	4.83%	7.14%	4.17%
EWBC	70 Outperform	$10.25B	8.93	15.89%	3.02%	13.84%	2.04%
Sector *	63 Neutral	$12.75B	9.36	8.64%	84.32%	13.82%	-3.89%

East West Bancorp Corporate Events

East West Bancorp Reports Record Income and Dividend Increase

On January 23, 2025, East West Bancorp announced a record net income of $1.2 billion for the full year 2024, with diluted earnings per share of $8.33. The company reported significant growth in deposits, reflecting strong customer relationships, and a 12% increase in fee income. East West Bancorp also revealed an additional $300 million share repurchase authorization and a 9% increase in its common stock dividend, showcasing its robust capital base and profitability. The announcement highlights the company’s commitment to supporting communities affected by wildfires in Southern California and its continued dedication to serving its clients.