Anthony Elian, an analyst from J.P. Morgan, maintained the Sell rating on First Hawaiian (FHB – Research Report). The associated price target remains the same with $29.00.
Anthony Elian has given his Sell rating due to a combination of factors affecting First Hawaiian’s financial outlook. One of the primary concerns is the bank’s loan growth prospects, which are expected to align with industry peers, indicating limited potential for significant expansion. The growth is anticipated to be more pronounced in the mainland US rather than Hawaii, driven by existing customer relationships and better risk-adjusted returns. However, the exposure to the auto industry through dealer floorplan loans could face challenges due to potential tariff impacts, affecting loan balances rather than credit quality.
Another critical factor is the bank’s asset-sensitive balance sheet, with a significant portion of loans tied to floating rates and a considerable amount of deposits being rate-sensitive. This positioning makes the bank vulnerable to interest rate declines, as floating rate loans would reprice faster than deposits. Additionally, First Hawaiian’s shares are trading at a premium compared to its peers, which limits the upside potential. Despite the bank’s strong credit culture and high-quality management, these factors contribute to a cautious outlook, leading to the Sell rating.