Buy low, sell high is the golden rule of investing, but East West Bancorp's (EWBC) recent price rally prompts the question: is this a sustainable investment opportunity? With a strong buy consensus from analysts, 10 strong buys and 3 buys against a single hold, the sentiment is bullish. The estimated EPS for the next fiscal year is 8.4, indicating robust growth. The valuation real value stands at 70.8, slightly below the market value of 77.18, suggesting the stock is not overpriced. The analyst target price estimated value is 65.75, with the highest and lowest estimated target prices being 72.98 and 59.83 respectively. This indicates a potential downside risk, but the possible upside price of 78.29 also suggests room for growth. The period momentum indicator and price action indicator are slightly negative at -0.02 and -0.01 respectively, hinting at a possible slowdown. However, with a daily change rate of 1, the stock's price remains dynamic. As a player in the Banks - Regional category of the Financial Services industry, East West Bancorp is a domestic stock to watch. The recent rally may be just the beginning of a sustainable investment opportunity. We use predictive indicators to assess East West Bancorp, aiding investors in analyzing its daily demand, supply, volume, patterns, and price fluctuations to determine its real value. Various methods are applied to calculate East West's intrinsic value based on widely recognized predictive technical indicators. Amidst unprecedented political and economic uncertainty, let's delve into what's happening with East West Bancorp.
The successful prediction of East West
stock price could yield a significant profit to investors. But is it possible? The efficient-market hypothesis suggests that all published
stock prices of traded companies, such as East West Bancorp, already reflect all publicly available information. This academic statement is a fundamental principle of many financial and investing theories used today. However, the typical investor usually disagrees with a 'textbook' version of this hypothesis and continually tries to find mispriced stocks to increase returns. We use internally-developed statistical techniques to arrive at
the intrinsic value of East West based on East West hews, social hype, general headline patterns, and widely used
predictive technical indicators. We also calculate exposure to East West's
market risk, different
technical and
fundamental indicators, relevant financial multiples and ratios, and then
comparing them to East West's related companies.
Use Technical Analysis to project East expected Price
East West technical stock analysis exercises models and trading practices based on price and volume transformations, such as the moving averages, relative strength index, regressions, price and return correlations, business cycles, stock market cycles, or different charting patterns.
A focus of East West technical analysis is to determine if market prices reflect all relevant information impacting that market. A technical analyst looks at the history of East West trading pattern rather than external drivers such as economic, fundamental, or social events. It is believed that price action tends to repeat itself due to investors' collective, patterned behavior. Hence technical analysis focuses on identifiable price trends and conditions.
More Info...East West Gross Profit
East West Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing East West previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show East West Gross Profit growth over the last 10 years. Please check East West's
gross profit and other
fundamental indicators for more details.
Breaking down East West Further
East West Bancorp reported the previous year's revenue of 3.97
B. Net Income was 1.16
B with profit before overhead, payroll, taxes, and interest of 2.16
B.
Total Revenue Breakdown
East West's Total Revenue is increasing over the years with slightly volatile fluctuation. Overall, Total Revenue is expected to go to about 4.2
B this year. Total Revenue usually refers to the total amount of income generated by the sale of goods or services related to the company's primary operations. At present, East West's Total Revenue is projected to increase significantly based on the last few years of reporting.
| 2017 | 1.35 Billion |
| 2018 | 1.55 Billion |
| 2019 | 1.66 Billion |
| 2020 | 1.6 Billion |
| 2021 | 1.8 Billion |
| 2022 | 2.32 Billion |
| 2023 | 3.97 Billion |
| 2024 | 4.17 Billion |
"Never put all your eggs in one basket" is a time-honored adage in the world of finance, and it certainly applies to the recent price rally of East West Bancorp (EWBC). The company's stock has seen a surge, but investors should be cautious. With a Price to Earnings ratio of 15.81X and a Book Value Per Share of 50.48X, the stock is not undervalued. The company's Return on Equity stands at 17%, which is quite impressive. However, the Probability of Bankruptcy is 40.53%, which indicates a high level of risk. Therefore, while the recent rally might seem attractive, investors should carefully consider the sustainability of this investment opportunity.
East West has a small chance to finish above $79 in 2 months
East West Bancorp's Risk Adjusted Performance has slightly increased to 0.08, suggesting a minor improvement in the company's risk-return trade-off. However, investors should remain vigilant as the stock price may dip in the near term. Despite this, given the current market dynamics and the bank's strong fundamentals, there's a slight chance that East West Bancorp's stock could surpass $79 within the next two months. This forecast should be approached with caution due to potential market volatility. East West Bancorp has relatively low volatility, with a skewness of 0.29 and kurtosis of 0.31. Understanding market volatility trends can help investors time the market.
Proper use of volatility indicators can measure East West's stock risk against market volatility during both bullish and bearish trends. Bear markets' higher volatility can impact East West's stock price and stress investors, often prompting portfolio rebalancing.In conclusion, despite the recent price surge of East West Bancorp (EWBC), the valuation real value of
70.8 suggests that the stock may be overvalued compared to its current market value of
77.18. However, the strong buy consensus from analysts, with 10 strong buys and 3 buys against a single hold, indicates a positive outlook for the stock. The possible upside price of 78.29 and the EPS estimate for next year at 8.4 further support this bullish sentiment. Investors should, however, be cautious of the potential downside price of 75.25 and the lowest estimated target price of 59.83. Therefore, while the stock presents potential for growth, investors should carefully consider the risks associated with the current valuation hype..
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Rifka Kats is a Member of Macroaxis Editorial Board. Rifka writes about retail product and service companies from the perspective of a regular consumer and sophisticated investor at the same time. She is passionate about corporate ethics and equality in the workforce.
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