© Reuters.
On Friday, Keefe, Bruyette & Woods (KBW) revised its stance on Bank of California (NYSE:), upgrading the stock from Market Perform to Outperform and increasing the price target to $18.00 from $16.00 previously.
The financial institution has been recognized for its strategic efforts to reduce financial and non-financial expenses, which are expected to contribute significantly to its profitability objectives.
According to the update, Banc of California has outlined up to seven different strategies to achieve its profitability goals, indicating a diversified approach rather than relying on a single method. This multifaceted plan aims to achieve an approximate return on average assets (ROAA) of 1.1% and a return on tangible common equity (ROTCE) of 13% by the fourth quarter of 2024.
KBW analysis suggests that Banc of California's earnings per share (EPS) for the fourth quarter of 2024 could reach $0.45. This figure annualizes to an EPS of $1.80, which correlates to an ROAA of 1.0% and a ROTCE of 12.4%. These projections are slightly more conservative than the current guidance provided by the bank.
The company's assessment of the potential outcomes of Banc of California shares is skewed positively, with an up-to-down ratio of more than 2:1 (+29% versus -13%). In an optimistic scenario, this ratio could expand to almost 4:1 (+50% versus -13%). The analysis emphasizes that the bank's success in both the base case and the bullish scenario is likely driven by its internal initiatives rather than external economic factors.
This article was generated with the support of ai and reviewed by an editor. For more information consult our T&C.
