Shares of Western Alliance Bancorporation (WAL:NYE) took a big hit on March 13, dropping 47.06% as investors fled bank stocks amid concerns about liquidity. However, despite the negative sentiment, Wall Street remains bullish on the WAL stock prospects, with analysts predicting substantial upside potential.
To calm investors, WAL’s management has taken steps to shore up its liquidity position, which includes having cash reserves exceeding $25 billion and insured deposits now exceeding 50% of total deposits. Its CET1 ratio, a key metric for a bank’s ability to withstand financial distress, is also better than its peers, standing at approximately 7.9%.
These efforts seem to have paid off, with the WAL stock up about 5.3% in after-hours trading. Analysts remain optimistic about WAL’s solid credit quality and a sharp recovery in average deposit balances from the end of 2022, giving the stock a Strong Buy consensus rating based on six Buy and one Hold recommendations.
The average price target for WAL stock is $80.65, implying a potential upside of 220.94%. While investors may be fleeing bank stocks, analysts believe now could be the time to snap up shares of Western Alliance Bancorporation.
Company Profile:
Western Alliance Bancorporation operates as the bank holding company for Western Alliance Bank that provides various banking products and related services primarily in Arizona, California, and Nevada. It operates through Commercial and Consumer Related segments.
In addition, the company provides other financial services, such as internet banking, wire transfers, electronic bill payment and presentment, funds transfer and other digital payment offerings, lockbox services, courier, and cash management services.
Further, it holds certain investment securities, municipal and non-profit loans, and leases; invests primarily in low-income housing tax credits and small business investment corporations; and holds certain real estate loans and related securities. Western Alliance Bancorporation was founded in 1994 and is headquartered in Phoenix, Arizona. (Klonopin)
