PacWest Bancorp price target lowered to $8 from $10 at Truist

Truist lowered the firm’s price target on PacWest Bancorp to $8 from $10 and keeps a Hold rating on the shares as part of a broader research note on Community Banks that reflects the firm’s updated interest rate forward curve assumption of 50 bps of rate cuts in the second half of next year and 100 bps of cuts in 2025. The outlook for FY24 remains challenging for the banking industry, though earnings growth should return in 2025, limited by incrementally higher credit losses and net interest margin compression from rate cuts, the analyst tells investors in a research note. The biggest wildcard to earnings estimates in 2024/2025 is the trajectory of net charge offs and loan loss provisioning as identifying the peak level of loan losses is difficult to forecast given the wide range of potential economic outcomes and Fed monetary policy actions, the firm added.