) first quarter 2012 earnings were in line with the Zacks Consensus
Estimate. Results were negatively impacted by lower revenue. We
believe that a weak interest rate environment and low investment
returns will restrict any significant bottom-line improvement in
the near term.
On a price-to-book basis, the shares currently trade at 2.3x, a
substantial premium to the industry average of 1.0x. The valuation
on a price-to-book basis looks reasonable, given a trailing
12-month ROE of 15.6% versus industry average of 6.1%.
Our six-month target price of $41.00 equates to about 13.4x 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 (WABC): Free Stock Analysis
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