Arizona-based Western Alliance (NYSE:WAL) is one of the regional bank stocks in focus on Wall Street and on social media recently. The sector has come under renewed scrutiny in the last week due to the problems and subsequent failure of First Republic, a California-based lender. WAL stock tumbled 15% yesterday and is down slightly in early trading today.
Yesterday, Arizona-based Western Alliance and a California-based regional bank PacWest Bancorp (NASDAQ:PACW) both tumbled sharply and underwent “multiple volatility halts.” The selloffs and halts indicate that many investors are betting that PACW and WAL will be the next regional banks to go under.
But like WAL, PACW is falling only slightly this morning. That indicates that some investors are anticipating that the banks will be boosted by more dovish-than-expected actions and statements by the Federal Reserve later today.
WAL Stock Has Multiple, Prominent Backers
A number of prominent firms and individuals have expressed bullishness about the outlook of WAL stock in recent weeks.
Described by Reuters as “one of the world’s most profitable hedge funds,” Citadel acquired a 5.3% stake in Western Alliance in March. And Bill Gross, one of America’s most well-respected bond buyers, bought WAL stock recently.
Meanwhile, on April 20, Bank of America raised its price target on WAL stock to $48 from $41. After evaluating WAL’s first-quarter results, Bank of America believes that the regional bank’s situation was better than many had believed. BAC added that WAL’s net interest income prognosis had exceeded its previous estimate. BofA maintained a “buy” rating on Western Alliance.
Heading into today, the shares have tumbled 60% in the last three months, but they are roughly four times above their 52-week low of $7.46.
On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
