Western Alliance Bancorp rises as BofA resumes coverage at "buy"

First Republic Bank

16/05/2023 15:24

** Shares of Western Alliance Bancorp  WAL.N  up 4.6% at
$32.17 as BofA Global Research reinstates coverage with "buy",
saying regional lender's business model more resilient than
perceived
    ** "Superior profitability/solid execution" should allow WAL
to navigate the banking crisis, BofA writes in note
    ** Recent conversation with management and updates from the
bank suggest limited fundamental impact due to stock volatility
- BofA
    ** Brokerage says improved visibility on "steady-state"
ROTCE (return on tangible common equity) could lead to a more
meaningful stock re-rating
    ** Risk/reward attractive at 0.7x TBV (tangible book value),
4x P/E, the analysts say
    ** BofA sets price objective at $42 (down from $48),
implying ~30% upside to current levels
    ** Trading in regional banks has whipsawed investors since
collapses of Silicon Valley Bank and Signature Bank in March,
and First Republic Bank's failure earlier this month revived
contagion fears
    ** WAL's shares have shed ~55% since March 8, just before
the onset of the banking crisis

 (Lance Tupper is a Reuters market analyst. The views expressed
are his own)
 ((lance.tupper@thomsonreuters.com
lance.tupper@tr.com 1-646-279-6380))