Western Alliance (WAL) Valuation Check After Lawsuit-Linked Shareholder Investigation and Legal Scrutiny
Western Alliance Bancorporation (WAL) has landed in the legal spotlight after suing borrower Cantor Group V LLC over alleged collateral fraud, a move that quickly drew a securities investigation from Rosen Law Firm.
See our latest analysis for Western Alliance Bancorporation.
Even after the legal flare up around Cantor Group V LLC and the ensuing shareholder probe, Western Alliance Bancorporation's share price has held at about $85.36. Recent multi week share price gains contrast with a softer 1 year total shareholder return, which suggests that near term momentum may be rebuilding while the longer term story remains broadly intact.
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With shares still below both analyst targets and some intrinsic value estimates despite solid revenue and profit growth, investors now face a key question: is Western Alliance quietly undervalued, or is the market already discounting all future upside?
Most Popular Narrative Narrative: 16.4% Undervalued
Western Alliance Bancorporation's most followed narrative points to a fair value of about $102.06, notably above the recent $85.36 close. This sets up a valuation story grounded in earnings growth and margin expansion assumptions.
The analysts have a consensus price target of $97.8 for Western Alliance Bancorporation based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $105.0, and the most bearish reporting a price target of just $85.0.
Curious how projected double digit revenue growth, rising profitability and a lower future earnings multiple can still support a higher value than today? See how those moving parts combine to justify this richer fair value story.
Result: Fair Value of $102.06 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, concentrated commercial real estate exposure and rising compliance costs, as Western Alliance nears the $100 billion threshold, could quickly challenge this optimistic valuation narrative.
Find out about the key risks to this Western Alliance Bancorporation narrative.
Build Your Own Western Alliance Bancorporation Narrative
If this take does not quite match your view, or you prefer digging into the numbers yourself, you can build a custom narrative in just a few minutes, starting with Do it your way
A great starting point for your Western Alliance Bancorporation research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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