East West (NasdaqGS:EWBC) Q3 Earnings: What Can You Expect?

in EARNINGS/INVESTING IDEAS by

East West Bancorp, Inc. (NasdaqGS:EWBC) is scheduled to report Q3 earnings results before markets open for trading on October 22, 2020.

The company is expected to report earnings of $0.95/share on revenue of $395.1 million. The consensus earnings per share (EPS) of $0.95/share is based on a poll of 10 analysts and represents a decline in eps of −19.1% over the same quarter last year, when the company reported earnings of $1.17/share.

The revenue forecast of $395.1 million based on a poll of 8 analysts implies a year-over-year (YoY) decline in revenue of −6.2%. Last year the company reported $421.3 million in revenue for the quarter.

Expected to report EPS contraction of −19.1% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $395.05 $421.28 −6.2%
EPS $0.95 $1.17 −19.1%

Earnings Call Trends

Historically, management has exceeded analyst expectations 4 out of the last 8 tracked quarters, and missed expectations 4 quarters.

What are your expectations from East West Bancorp, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.74 $0.70 −5.8% Missed
Q1, 2020 $0.97 $1 3.6% Beat
Q4, 2019 $1.15 $1.28 10.9% Beat
Q3, 2019 $1.20 $1.17 −2.1% Missed
Q2, 2019 $1.23 $1.24 0.9% Beat
Q1, 2019 $1.22 $1.16 −4.6% Missed
Q4, 2018 $1.16 $1.18 1.5% Beat
Q3, 2018 $1.14 $1.17 2.4% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price did not react much to the update.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 23, 2020 $35.36 $35.61 0.7% Increase
April 23, 2020 $26.98 $30.37 12.6% Increase
January 23, 2020 $47.44 $49.23 3.8% Increase
October 17, 2019 $43.60 $41.30 −5.3% Decline

Fundamentals And Technical Analysis

East West Bancorp, Inc. is currently trading at $36.66/share, down 0.0% for the day. The company is trading at approximately 70.7% of its 52-week high of $51.88/share. The company’s stock price is up 2.9% since the last earnings report and up 0.5% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 54.68 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:EWBC Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 8.59 and a forward P/E multiple of 10.15.

East West Bancorp, Inc.’s current share price also implies a price-to-book (P/B) multiple of 1.04. The following table summarizes some other key fundamental ratios:

Data as of October 20, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $36.66
P/E Ratio 8.6x
P/E Ratio (Fwd) 10.1x
PEG Ratio −1.2
Total Debt / Total Capital 38.4%
Levered Free Cash Flow $709.5 million
Price To Sales 3.3x

Finbox

East West Bancorp, Inc. is a mid-cap stock with a market capitalization of $5.187 billion. The company operates in the Financials sector and the Banks industry.

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 in the United States and Greater China. 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, time deposits, and individual retirement accounts. Its loan products include commercial and residential real estate, lines of credit, construction, trade finance, letters of credit, commercial business, housing loans, asset-based lending, and equipment financing, as well as financing to clients needing a financial bridge to facilitate their business transactions between the United States and Greater China. The company also provides various wealth management, treasury management, foreign exchange, and interest rate and commodity hedging risk management services; and internet-based services comprising online banking services. As of July 23, 2020, it operated approximately 125 locations in California, Georgia, Massachusetts, Nevada, New York, Texas, and Washington; 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 founded in 1998 and is headquartered in Pasadena, California.

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