Northwest Bancshares (NWBI) AI Stock Analysis

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Northwest Bancshares

(NASDAQ:NWBI)

Rating:76Outperform

Price Target:―

Northwest Bancshares demonstrates robust financial performance with strong revenue growth and strategic advancements, such as the Penns Woods Bancorp merger. Despite pressures on profitability margins and cash flow challenges, the stock's attractive valuation and a positive outlook from recent earnings call enhance its appeal. However, caution is advised due to technical indicators signaling potential overbought conditions and economic uncertainties that could impact future performance.

Northwest Bancshares (NWBI) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$1.62B

Dividend Yield6.33%

Average Volume (3M)868.63K

Price to Earnings (P/E)14.2

Beta (1Y)0.71

Revenue Growth6.27%

EPS Growth-12.50%

CountryUS

Employees1,996

SectorFinancial

Sector Strength82

IndustryBanks - Regional

Share Statistics

EPS (TTM)0.35

Shares Outstanding127,752,450

10 Day Avg. Volume691,717

30 Day Avg. Volume868,625

Financial Highlights & Ratios

PEG Ratio3.89

Price to Book (P/B)0.95

Price to Sales (P/S)0.00

P/FCF Ratio11.99

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$13.50

Price Target Upside9.67% Upside

Rating ConsensusModerate Sell

Number of Analyst Covering3

Northwest Bancshares Business Overview & Revenue Model

Company DescriptionNorthwest Bancshares, Inc. operates as the holding company for Northwest Bank, a state-chartered savings bank that provides personal and business banking solutions. The company accepts various deposits, including checking, savings, money market deposit, term certificate, and individual retirement accounts. It also offers loan products comprising one-to-four-family residential real estate loans and loans collateralized by multi-family residential and commercial real estate; commercial business loans; and consumer loans, including automobile loans, sales finance loans, unsecured personal loans, credit card loans, and loans secured by deposit accounts. The company also offers investment management and trust services. As of December 31, 2021, it operated 170 community-banking locations in Pennsylvania, Western New York, Eastern Ohio, and Indiana. Northwest Bancshares, Inc. was founded in 1896 and is headquartered in Columbus, Ohio.

How the Company Makes MoneyNorthwest Bancshares generates revenue primarily through its interest income from lending activities. This includes loans to individuals, such as mortgages and personal loans, and loans to businesses. The company also earns money through non-interest income, which encompasses fees and service charges from deposit accounts, card services, and wealth management services. Additionally, Northwest Bancshares may engage in investment activities that contribute to its earnings. Key factors influencing its revenue include the interest rate environment, economic conditions, and the company's ability to attract and retain customers through competitive product offerings and customer service. While the company may have partnerships, specific data on significant partnerships is not available.

Northwest Bancshares Financial Statement Overview

Summary

Northwest Bancshares demonstrates strong revenue growth and a solid balance sheet with zero debt and substantial cash reserves. However, profitability margins are under pressure, and cash flow metrics reflect challenges in cash generation. While the company maintains a sound equity base, there is a need for improvement in cash flow management to sustain long-term growth.

Income Statement

Positive

Northwest Bancshares shows a stable revenue base with a recent revenue growth rate of approximately 27.07% from 2023 to 2024. The gross profit margin remains robust at 100%, typical for the banking industry. However, the net profit margin decreased to 15.00% in 2024 from 25.62% in 2023, indicating reduced profitability. The EBIT margin also decreased to 2.99% in 2024, suggesting pressure on operational profitability.

Balance Sheet

Positive

The company's balance sheet reflects strong liquidity with significant cash reserves. The equity ratio improved to 11.08% in 2024 from 10.76% in 2023, showing a slight increase in financial stability. The debt-to-equity ratio improved as total debt was eliminated in 2024, reducing financial leverage risk. Return on equity declined to 6.28% from 8.70%, indicating a decrease in shareholder profitability.

Cash Flow

Positive

Operating cash flow decreased by 32.86% in 2024, reflecting a drop in cash-generating efficiency. The free cash flow also decreased by 26.07% from the previous year. The operating cash flow to net income ratio was 0.62 in 2024, indicating moderate cash flow coverage relative to net income.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
520.47M	526.63M	529.72M	506.89M	520.72M
	Gross Profit
669.20M	526.63M	529.72M	506.89M	520.72M
	EBIT
20.01M	202.88M	173.69M	201.12M	92.53M
	EBITDA
0.00	0.00	180.14M	207.76M	97.26M
	Net Income Common Stockholders
100.28M	134.96M	133.67M	154.32M	74.85M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.40B	122.26M	1.36B	2.83B	2.14B
	Total Assets
14.41B	14.42B	14.11B	14.50B	13.81B
	Total Debt
444.70M	642.66M	900.22M	391.72M	411.84M
	Net Debt
156.32M	520.40M	760.86M	-887.54M	-324.44M
	Total Liabilities
12.81B	12.87B	12.62B	12.92B	12.27B
	Stockholders Equity
1.60B	1.55B	1.49B	1.58B	1.54B
Cash Flow		Free Cash Flow
62.34M	84.33M	171.11M	187.94M	128.18M
	Operating Cash Flow
62.34M	92.89M	175.43M	205.46M	140.44M
	Investing Cash Flow
174.97M	-239.68M	-917.42M	-232.97M	-560.58M
	Financing Cash Flow
-99.40M	129.69M	-397.90M	570.49M	1.10B

Northwest Bancshares Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price12.31

Price Trends

50DMA

11.84

Positive

100DMA

12.21

Positive

200DMA

12.66

Negative

Market Momentum

MACD

0.24

Positive

RSI

52.71

Neutral

STOCH

37.68

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NWBI, the sentiment is Neutral. The current price of 12.31 is below the 20-day moving average (MA) of 12.34, above the 50-day MA of 11.84, and below the 200-day MA of 12.66, indicating a neutral trend. The MACD of 0.24 indicates Positive momentum. The RSI at 52.71 is Neutral, neither overbought nor oversold. The STOCH value of 37.68 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for NWBI.

Northwest Bancshares Risk Analysis

Northwest Bancshares disclosed 48 risk factors in its most recent earnings report. Northwest Bancshares reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 3 New Risks

We may be subject to intellectual property-related disputes or may fail to effectively obtain, maintain, defend, or enforce our intellectual property rights. Q4, 2024

Data privacy and cybersecurity are areas of heightened legislative and regulatory scrutiny. Q4, 2024

A slowdown in economic growth or a resumption of recessionary economic conditions due to global events could have an adverse effect on our business in the future. Q4, 2024

Northwest Bancshares Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NWBI	76 Outperform	$1.62B	14.19	7.19%	6.33%	6.27%	-12.50%
CUBI	74 Outperform	$1.71B	13.52	8.14%	―	-5.61%	-44.11%
FCF	72 Outperform	$1.69B	11.91	9.91%	3.24%	6.42%	-15.95%
FBNC	69 Neutral	$1.76B	20.10	6.03%	2.07%	-2.00%	-23.84%
LKFN	68 Neutral	$1.57B	17.53	13.44%	3.20%	5.03%	-3.19%
Sector *	64 Neutral	$12.78B	9.87	7.67%	17015.06%	12.34%	-5.99%
CLBK	48 Neutral	$1.58B	97.23	-0.15%	―	4.29%	-109.93%

* Financial Sector Average

Performance Comparison

NWBI

Northwest Bancshares

12.31

1.89

18.14%

FBNC

First Bancorp

41.24

10.54

34.33%

FCF

First Commonwealth

15.60

2.42

18.36%

LKFN

Lakeland Financial

59.68

1.40

2.40%

CUBI

Customers Bancorp

51.32

5.81

12.77%

CLBK

Columbia Financial

14.57

-1.10

-7.02%

Northwest Bancshares Earnings Call Summary

Earnings Call Date:Apr 28, 2025

(Q1-2025)

% Change Since: 5.57%|

Next Earnings Date:Jul 28, 2025

Earnings Call Sentiment Positive

The earnings call reflects a strong financial performance in the first quarter of 2025, with record earnings, strategic growth in commercial lending, and successful merger progress. However, the decrease in non-interest income and economic uncertainties present challenges moving forward.

Q1-2025 Updates

Positive Updates

Record Earnings and Revenue Growth

Northwest Bancshares delivered $156 million in revenue and a net income of $43 million, marking a 48% increase compared to the same quarter last year. This is a record for earnings in a first quarter for Northwest Bancshares.

Strategic Shift Towards Commercial Lending

There was a 20% increase in average commercial C&I loans over the last year, reflecting a strategic shift towards commercial lending.

Improved Financial Metrics

The net interest margin expanded by 45 basis points to 3.87%, and the efficiency ratio improved to 57.7% from 59.6% in the prior quarter.

Successful Merger Approval

Regulatory approvals were received for the merger with Penns Woods Bancorp, with the merger expected to close by late July 2025.

Stable and Growing Deposit Base

Total deposits increased by $60 million quarter-over-quarter and grew 1.7% versus the first quarter of 2024, with a cost of deposits at 1.59%.

Negative Updates

Decrease in Non-Interest Income

Non-interest income decreased by $11.7 million from the previous quarter due to the absence of prior quarter transactions such as a $5.9 million gain on the sale of Visa B shares.

Economic Uncertainty

The current operating environment is marked by significant market volatility and economic uncertainty, which could impact future financial performance.

Company Guidance

During Northwest Bancshares Inc.'s First Quarter 2025 Earnings Conference Call, the company reported strong financial performance with $156 million in revenue and a net income of $43 million, a 48% increase from the same quarter last year. Earnings per diluted share rose to $0.34 from $0.23 in the first quarter of 2024. The firm achieved a 20% increase in average commercial C&I loans over the last year and improved its net interest margin by 45 basis points to 3.87%. The cost of deposits was reduced to 1.59%, remaining competitive among peers. The company declared a dividend of $0.20 per share, maintaining a 121-quarter streak. Northwest expects its margin to perform at the high end of its outlook range, assuming one to three Federal Reserve rate cuts later in the year. The company also announced progress on its merger with Penns Woods Bancorp, scheduled to close by late July, which will position Northwest among the top 100 U.S. banks by asset size. Despite market volatility, Northwest remains focused on execution, cost control, and risk management to sustain growth.

Northwest Bancshares Corporate Events

M&A Transactions

Northwest Bancshares Announces Merger with Penns Woods

Positive

Dec 17, 2024

Northwest Bancshares announced a merger agreement with Penns Woods Bancorp, which will see Penns Woods and its subsidiaries, Luzerne Bank and Jersey Shore State Bank, merge into Northwest and its subsidiary, Northwest Bank. This merger is expected to enhance Northwest’s market position and expand its service offerings, though it is subject to shareholder and regulatory approvals.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.