NEW YORK (TheStreet) -- PacWest (PACW - Get Report) stock has been upgraded to "outperform" with a $47 price target, FBR Capital Markets said Monday. The firm said the CapitalSource acquisition should be accretive to earnings and book value.
Separately, TheStreet Ratings team rates PACWEST BANCORP as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate PACWEST BANCORP (PACW) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, increase in net income, solid stock price performance and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 9.0%. Since the same quarter one year prior, revenues rose by 26.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Commercial Banks industry. The net income increased by 85.9% when compared to the same quarter one year prior, rising from $13.49 million to $25.08 million.
- The gross profit margin for PACWEST BANCORP is currently very high, coming in at 98.14%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 27.41% significantly outperformed against the industry average.
- Powered by its strong earnings growth of 54.05% and other important driving factors, this stock has surged by 39.22% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
- PACWEST BANCORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, PACWEST BANCORP reported lower earnings of $1.08 versus $1.53 in the prior year. This year, the market expects an improvement in earnings ($2.50 versus $1.08).
- You can view the full analysis from the report here: PACW Ratings Report