We are downgrading our long-term recommendation on
) from Neutral to Underperform based on weak fourth-quarter results
and an overall sluggish economic environment. The company's fourth
quarter 2011 earnings slightly missed the Zacks Consensus Estimate.
Results were negatively impacted by reduced revenues, partially
offset by lower non-interest expenses. The company's credit quality
continued to show improvement in the quarter. We believe that a
weak interest rate environment, and low investment returns will
restrict any significant bottom-line improvement in the near term.
Our six-month target price of $43.00 equates to about 14.0x our
earnings estimate for 2012. Combined with the $1.48 per share
annual dividend, this price target implies an expected negative
return of 8.5% over that period, which is consistent with our
long-term Underperform recommendation on the shares.
WESTAMER BANCP (
): Free Stock Analysis Report
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