Maxim Group analyst Michael Diana has maintained their neutral stance on WABC stock, giving a Hold rating yesterday.
Michael Diana has given his Hold rating due to a combination of factors affecting Westamerica Bancorporation’s financial outlook. Despite the bank’s strong performance in the first quarter of 2025, where it exceeded earnings expectations, there are concerns about declining net interest margins and earning assets. These declines are attributed to a shrinking auto loan portfolio and adjustments in collateralized loan obligations, which are expected to continue impacting profitability.
While Westamerica Bancorporation is recognized for its excellent credit quality and expense management, the anticipated gradual decline in profitability over the coming quarters tempers enthusiasm for a higher rating. The current valuation of the bank’s shares, relative to its earnings estimates, does not present a compelling case for a Buy rating. Consequently, the Hold rating reflects a cautious stance, acknowledging the bank’s strengths while considering the potential challenges ahead.
Diana covers the Financial sector, focusing on stocks such as Nicolet Bankshares, Cullen/Frost Bankers, and First Savings Financial Group. According to TipRanks, Diana has an average return of 1.2% and a 50.60% success rate on recommended stocks.
In another report released yesterday, Piper Sandler also maintained a Hold rating on the stock with a $50.00 price target.