Western Alliance raised to Buy at Deutsche due to rate cuts, soft landing
Deutsche Bank upgraded Western Alliance Bancorporation (NYSE:WAL) to Buy from Hold, citing its favorable position to benefit from expected Federal Reserve rate cuts and a potential soft landing. Analyst Bernard von-Gizycki noted that lower borrowing costs could enhance loan growth and credit profile. While robust mortgage growth is not anticipated, improvements in mortgage origination could positively impact earnings. WAL's stock rose 0.3% in morning trading, with Q3 2024 results due on Oct. 17, 2024.
Deutsche Bank upgraded Western Alliance Bancorporation (NYSE:WAL) stock to Buy from Hold on Monday on the view that it is "best positioned" to benefit from the Federal Reserve's monetary easing cycle and a potential soft landing.
Rate cuts are expected to lower the bank's borrowing costs from an elevated wholesale funding position, while a soft landing likely would aid loan growth and protect its credit profile, analyst Bernard von-Gizycki wrote in a note to clients.
And, "while we don't assume robust mortgage growth, we do believe if the mortgage origination backdrop improves significantly, WAL is well positioned to benefit and provides nice optionality to earnings," he added.
Deutsche's Buy rating differs from the SA Quant system rating of Hold and agrees with the average sell-side analyst rating of Buy.
(WAL) edged up 0.3% in Monday morning trading.
The lender is slated to post its Q3 2024 results on Oct. 17, 2024.