Western Alliance Posts Q3 Earnings Miss, Why 5 Analysts Are Still Bullish

Core Viewpoint - Western Alliance Bancorporation reported mixed earnings for Q3, with earnings per share of $1.80, missing expectations of $1.89, but revenues of $823 million exceeded consensus of $807 million [1][2][3] Financial Performance - Earnings per share were reported at $1.80, with operating earnings at $1.81, both below the consensus estimate of $1.89 [3] - The company generated strong revenues of $823 million, surpassing the consensus estimate of $807 million [1] - Adjusted pre-provision net revenue (PPNR) was $285.7 million, missing expectations by 6% due to higher expenses related to ECR deposit costs [4] Analyst Ratings and Expectations - RBC Capital Markets maintained an Outperform rating with a price target of $99, noting decent overall performance despite headwinds [1] - Stephens maintained an Overweight rating with a price target of $102, indicating potential downside in PPNR for Q4 [2] - Truist Securities reiterated a Buy rating with a price target of $100, highlighting mixed guidance for FY 2024 [4] Cost and Growth Insights - Higher ECR deposit costs were a significant factor in the earnings miss, with costs growing by 20% in Q3 [5] - ECR deposit balances increased by approximately $3 billion sequentially to $27.8 billion [5] - Management updated guidance, projecting loan growth of $4.5 billion but reducing deposit growth expectations from $14 billion to $11 billion [3]