D.A. Davidson on Monday upgraded PacWest Bancorp (NASDAQ:PACW) to Buy from Neutral, as last week’s ~54% selloff sparked by the collapse of Silicon Valley Bank (SIVB) “represents a more attractive entry point”.
Also, PacWest’s (PACW) financial update late on Friday was largely in line with the research firm’s Q1 expectations.
Shares of PacWest (PACW) dropped ~60% on Monday, continuing its decline from Thursday and tracking broader losses in the financial sector amid contagion fears from the SVB failure.
Analyst Gary Tenner cut 2023/2024 EPS estimates for PacWest (PACW) from $3.41/$3.73 to $3.37/$3.64, reflecting a greater pace of balance sheet contraction than expected. “Despite slightly lower EPS, less incremental funding need and improved CET1 ratios are net positives.”
He also cut the price target on PacWest (PACW) to $29 from $31, implying 134.8% upside potential to its last close. “While possibly conservative, we moderated our outlook with the recognition that market sentiment could remain a limiting factor on valuation over the intermediate term.”
D.A. Davidson’s stance is in line with bullish sell-side ratings, but contrasts SA Quant’s Hold rating.