EWBC Stock Forecast & Price Target

East West Bancorp Inc. has demonstrated a robust outlook due to anticipated revenue growth of 8% for 2025, driven predominantly by its Commercial Banking segment, which is the main source of the company's revenue. The financial reports indicate a positive adjustment to the forecasted net interest income (NII) for the second half of 2025, supporting an increase in earnings estimates, which reflects strong operational performance. Moreover, a narrowing of net charge-offs (NCOs) from a previous range of 25-35 basis points to 15-25 basis points suggests improved asset quality and risk management, contributing to a favorable investment proposition.

East West Bancorp faces significant risks that could negatively impact its earnings outlook, primarily stemming from potential increases in credit costs, decreased loan demand, and heightened competition for deposits. The commercial banking segment, which is the primary revenue generator for the Bank, may be particularly vulnerable to these challenges, suggesting a constrained growth trajectory. Furthermore, despite the overall bank sector experiencing optimism related to deregulation and sector rotation, East West Bancorp's valuation remains fundamentally discounted compared to broader market indices, contributing to a cautious outlook for its stock.