Cathay General Bancorp (CATY) Authorizes Another $75M Buyback - Piper Sandler
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Piper Sandler analyst Matthew Clark reiterated a Neutral rating and $44.00 price target on Cathay General Bancorp (NASDAQ: CATY) after the company announced the authorization of a new $75M share repurchase plan which equates to 2.3% of shares outstanding (based on 4/2 closing price). This new authorization follows its previously completed buyback program in which the company repurchased ~1.54M shares ($50M) over the course of 2020.
The analyst stated "If we were to assume CATY was willing and able to buyback all 1.8M shares at the current price, we estimate it would be 2.1% accretive to the Street's 2022 EPS estimate ($3.39) with TBV dilution of 1.4% earned back in 5.1 years using the simple method. TCE (ex PPP) would decline 41 bps to 10.67%. We have not assumed any share repurchase activity in our current 2021 / 2022 EPS estimates of $3.17 / $3.38 as we tend to believe that it is more attractive for banks to buyback stock if the earn-back of TBV dilution is less than 5 years."
Shares of Cathay General Bancorp closed at $42.35 yesterday.
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