Intrinsic value of East West Bancorp - EWBC

Previous Close

$66.23

  Intrinsic Value

$30.79

stock screener

  Rating & Target

str. sell

-54%

Previous close

$66.23

 
Intrinsic value

$30.79

 
Up/down potential

-54%

 
Rating

str. sell

Our model is not good at valuating stocks of financial companies, such as EWBC.

We calculate the intrinsic value of EWBC stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2017), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 9.5

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  17.60
  16.34
  15.21
  14.19
  13.27
  12.44
  11.70
  11.03
  10.42
  9.88
  9.39
  8.95
  8.56
  8.20
  7.88
  7.59
  7.33
  7.10
  6.89
  6.70
  6.53
  6.38
  6.24
  6.12
  6.01
  5.90
  5.81
  5.73
  5.66
  5.59
Revenue, $m
  1,643
  1,911
  2,202
  2,514
  2,848
  3,202
  3,577
  3,971
  4,385
  4,818
  5,271
  5,743
  6,234
  6,746
  7,278
  7,830
  8,405
  9,001
  9,622
  10,266
  10,937
  11,635
  12,361
  13,117
  13,905
  14,726
  15,582
  16,475
  17,407
  18,381
Variable operating expenses, $m
  363
  422
  487
  556
  629
  708
  790
  878
  969
  1,065
  1,165
  1,269
  1,378
  1,491
  1,608
  1,730
  1,857
  1,989
  2,126
  2,269
  2,417
  2,571
  2,732
  2,899
  3,073
  3,254
  3,444
  3,641
  3,847
  4,062
Fixed operating expenses, $m
  369
  377
  385
  394
  402
  411
  420
  430
  439
  449
  459
  469
  479
  490
  500
  511
  523
  534
  546
  558
  570
  583
  595
  609
  622
  636
  650
  664
  679
  693
Total operating expenses, $m
  732
  799
  872
  950
  1,031
  1,119
  1,210
  1,308
  1,408
  1,514
  1,624
  1,738
  1,857
  1,981
  2,108
  2,241
  2,380
  2,523
  2,672
  2,827
  2,987
  3,154
  3,327
  3,508
  3,695
  3,890
  4,094
  4,305
  4,526
  4,755
Operating income, $m
  911
  1,112
  1,330
  1,565
  1,816
  2,083
  2,366
  2,664
  2,977
  3,305
  3,647
  4,005
  4,378
  4,765
  5,169
  5,588
  6,025
  6,478
  6,949
  7,440
  7,950
  8,481
  9,034
  9,609
  10,210
  10,836
  11,489
  12,170
  12,882
  13,625
EBITDA, $m
  5,140
  6,032
  6,999
  8,038
  9,148
  10,327
  11,574
  12,887
  14,266
  15,709
  17,217
  18,789
  20,427
  22,132
  23,904
  25,746
  27,661
  29,651
  31,719
  33,870
  36,106
  38,433
  40,855
  43,378
  46,006
  48,745
  51,602
  54,583
  57,695
  60,946
Interest expense (income), $m
  104
  1,796
  1,901
  2,198
  2,519
  2,864
  3,232
  3,623
  4,037
  4,473
  4,930
  5,409
  5,908
  6,430
  6,973
  7,537
  8,125
  8,735
  9,370
  10,029
  10,714
  11,426
  12,167
  12,938
  13,740
  14,575
  15,445
  16,352
  17,297
  18,284
  19,314
Earnings before tax, $m
  -885
  -789
  -868
  -954
  -1,048
  -1,149
  -1,258
  -1,373
  -1,496
  -1,625
  -1,761
  -1,903
  -2,052
  -2,207
  -2,369
  -2,536
  -2,711
  -2,892
  -3,079
  -3,274
  -3,476
  -3,686
  -3,904
  -4,130
  -4,365
  -4,609
  -4,863
  -5,127
  -5,402
  -5,688
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -885
  -789
  -868
  -954
  -1,048
  -1,149
  -1,258
  -1,373
  -1,496
  -1,625
  -1,761
  -1,903
  -2,052
  -2,207
  -2,369
  -2,536
  -2,711
  -2,892
  -3,079
  -3,274
  -3,476
  -3,686
  -3,904
  -4,130
  -4,365
  -4,609
  -4,863
  -5,127
  -5,402
  -5,688

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  37,338
  43,439
  50,044
  57,143
  64,724
  72,776
  81,288
  90,252
  99,659
  109,507
  119,794
  130,520
  141,691
  153,313
  165,398
  177,959
  191,012
  204,576
  218,674
  233,329
  248,570
  264,426
  280,928
  298,112
  316,013
  334,673
  354,131
  374,432
  395,623
  417,752
Adjusted assets (=assets-cash), $m
  37,338
  43,439
  50,044
  57,143
  64,724
  72,776
  81,288
  90,252
  99,659
  109,507
  119,794
  130,520
  141,691
  153,313
  165,398
  177,959
  191,012
  204,576
  218,674
  233,329
  248,570
  264,426
  280,928
  298,112
  316,013
  334,673
  354,131
  374,432
  395,623
  417,752
Revenue / Adjusted assets
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
Average production assets, $m
  42,294
  49,205
  56,687
  64,728
  73,316
  82,436
  92,078
  102,231
  112,888
  124,043
  135,695
  147,845
  160,498
  173,663
  187,352
  201,580
  216,366
  231,731
  247,700
  264,301
  281,564
  299,525
  318,217
  337,682
  357,960
  379,096
  401,137
  424,133
  448,136
  473,202
Working capital, $m
  -38,612
  -44,922
  -51,752
  -59,094
  -66,934
  -75,260
  -84,063
  -93,332
  -103,061
  -113,245
  -123,882
  -134,975
  -146,527
  -158,546
  -171,043
  -184,033
  -197,531
  -211,559
  -226,138
  -241,293
  -257,054
  -273,451
  -290,517
  -308,287
  -326,800
  -346,096
  -366,218
  -387,212
  -409,126
  -432,010
Total debt, $m
  35,205
  40,696
  46,641
  53,030
  59,853
  67,100
  74,761
  82,828
  91,295
  100,158
  109,416
  119,069
  129,123
  139,583
  150,460
  161,764
  173,512
  185,720
  198,408
  211,598
  225,314
  239,584
  254,437
  269,902
  286,013
  302,807
  320,319
  338,590
  357,662
  377,578
Total liabilities, $m
  33,604
  39,095
  45,040
  51,429
  58,252
  65,499
  73,160
  81,226
  89,693
  98,557
  107,814
  117,468
  127,522
  137,982
  148,858
  160,163
  171,911
  184,118
  196,806
  209,997
  223,713
  237,983
  252,835
  268,300
  284,412
  301,205
  318,718
  336,989
  356,060
  375,977
Total equity, $m
  3,734
  4,344
  5,004
  5,714
  6,472
  7,278
  8,129
  9,025
  9,966
  10,951
  11,979
  13,052
  14,169
  15,331
  16,540
  17,796
  19,101
  20,458
  21,867
  23,333
  24,857
  26,443
  28,093
  29,811
  31,601
  33,467
  35,413
  37,443
  39,562
  41,775
Total liabilities and equity, $m
  37,338
  43,439
  50,044
  57,143
  64,724
  72,777
  81,289
  90,251
  99,659
  109,508
  119,793
  130,520
  141,691
  153,313
  165,398
  177,959
  191,012
  204,576
  218,673
  233,330
  248,570
  264,426
  280,928
  298,111
  316,013
  334,672
  354,131
  374,432
  395,622
  417,752
Debt-to-equity ratio
  9.430
  9.370
  9.320
  9.280
  9.250
  9.220
  9.200
  9.180
  9.160
  9.150
  9.130
  9.120
  9.110
  9.100
  9.100
  9.090
  9.080
  9.080
  9.070
  9.070
  9.060
  9.060
  9.060
  9.050
  9.050
  9.050
  9.050
  9.040
  9.040
  9.040
Adjusted equity ratio
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -885
  -789
  -868
  -954
  -1,048
  -1,149
  -1,258
  -1,373
  -1,496
  -1,625
  -1,761
  -1,903
  -2,052
  -2,207
  -2,369
  -2,536
  -2,711
  -2,892
  -3,079
  -3,274
  -3,476
  -3,686
  -3,904
  -4,130
  -4,365
  -4,609
  -4,863
  -5,127
  -5,402
  -5,688
Depreciation, amort., depletion, $m
  4,229
  4,920
  5,669
  6,473
  7,332
  8,244
  9,208
  10,223
  11,289
  12,404
  13,569
  14,784
  16,050
  17,366
  18,735
  20,158
  21,637
  23,173
  24,770
  26,430
  28,156
  29,952
  31,822
  33,768
  35,796
  37,910
  40,114
  42,413
  44,814
  47,320
Funds from operations, $m
  3,345
  4,131
  4,801
  5,519
  6,284
  7,095
  7,950
  8,850
  9,793
  10,779
  11,808
  12,881
  13,998
  15,159
  16,367
  17,622
  18,926
  20,281
  21,691
  23,156
  24,680
  26,266
  27,918
  29,638
  31,431
  33,300
  35,251
  37,286
  39,412
  41,632
Change in working capital, $m
  -5,779
  -6,309
  -6,831
  -7,341
  -7,840
  -8,327
  -8,803
  -9,269
  -9,729
  -10,184
  -10,637
  -11,092
  -11,552
  -12,019
  -12,497
  -12,989
  -13,498
  -14,027
  -14,579
  -15,156
  -15,761
  -16,397
  -17,066
  -17,770
  -18,513
  -19,296
  -20,122
  -20,994
  -21,914
  -22,884
Cash from operations, $m
  9,123
  10,441
  11,632
  12,860
  14,124
  15,421
  16,753
  18,119
  19,522
  20,963
  22,446
  23,973
  25,550
  27,178
  28,864
  30,611
  32,424
  34,309
  36,269
  38,312
  40,441
  42,663
  44,983
  47,408
  49,944
  52,596
  55,373
  58,280
  61,326
  64,516
Maintenance CAPEX, $m
  -3,597
  -4,229
  -4,920
  -5,669
  -6,473
  -7,332
  -8,244
  -9,208
  -10,223
  -11,289
  -12,404
  -13,569
  -14,784
  -16,050
  -17,366
  -18,735
  -20,158
  -21,637
  -23,173
  -24,770
  -26,430
  -28,156
  -29,952
  -31,822
  -33,768
  -35,796
  -37,910
  -40,114
  -42,413
  -44,814
New CAPEX, $m
  -6,325
  -6,911
  -7,482
  -8,041
  -8,587
  -9,121
  -9,642
  -10,153
  -10,656
  -11,155
  -11,652
  -12,150
  -12,653
  -13,165
  -13,689
  -14,228
  -14,786
  -15,365
  -15,969
  -16,601
  -17,264
  -17,960
  -18,693
  -19,464
  -20,278
  -21,136
  -22,041
  -22,996
  -24,003
  -25,066
Cash from investing activities, $m
  -9,922
  -11,140
  -12,402
  -13,710
  -15,060
  -16,453
  -17,886
  -19,361
  -20,879
  -22,444
  -24,056
  -25,719
  -27,437
  -29,215
  -31,055
  -32,963
  -34,944
  -37,002
  -39,142
  -41,371
  -43,694
  -46,116
  -48,645
  -51,286
  -54,046
  -56,932
  -59,951
  -63,110
  -66,416
  -69,880
Free cash flow, $m
  -798
  -700
  -771
  -850
  -936
  -1,031
  -1,133
  -1,242
  -1,358
  -1,481
  -1,610
  -1,746
  -1,888
  -2,037
  -2,191
  -2,352
  -2,519
  -2,693
  -2,873
  -3,059
  -3,253
  -3,454
  -3,662
  -3,878
  -4,102
  -4,335
  -4,578
  -4,829
  -5,091
  -5,364
Issuance/(repayment) of debt, $m
  1,952
  5,491
  5,945
  6,389
  6,823
  7,247
  7,661
  8,067
  8,467
  8,863
  9,258
  9,654
  10,054
  10,460
  10,876
  11,305
  11,748
  12,208
  12,688
  13,190
  13,717
  14,270
  14,852
  15,465
  16,112
  16,793
  17,512
  18,271
  19,072
  19,916
Issuance/(repurchase) of shares, $m
  4,656
  1,399
  1,528
  1,664
  1,806
  1,954
  2,109
  2,270
  2,437
  2,610
  2,790
  2,976
  3,169
  3,369
  3,577
  3,793
  4,016
  4,248
  4,489
  4,740
  5,000
  5,272
  5,554
  5,848
  6,155
  6,475
  6,809
  7,157
  7,521
  7,901
Cash from financing (excl. dividends), $m  
  6,608
  6,890
  7,473
  8,053
  8,629
  9,201
  9,770
  10,337
  10,904
  11,473
  12,048
  12,630
  13,223
  13,829
  14,453
  15,098
  15,764
  16,456
  17,177
  17,930
  18,717
  19,542
  20,406
  21,313
  22,267
  23,268
  24,321
  25,428
  26,593
  27,817
Total cash flow (excl. dividends), $m
  5,809
  6,191
  6,702
  7,203
  7,692
  8,170
  8,637
  9,095
  9,546
  9,992
  10,437
  10,884
  11,335
  11,793
  12,262
  12,745
  13,244
  13,763
  14,305
  14,871
  15,464
  16,088
  16,744
  17,436
  18,164
  18,933
  19,744
  20,599
  21,502
  22,454
Retained Cash Flow (-), $m
  -4,656
  -1,399
  -1,528
  -1,664
  -1,806
  -1,954
  -2,109
  -2,270
  -2,437
  -2,610
  -2,790
  -2,976
  -3,169
  -3,369
  -3,577
  -3,793
  -4,016
  -4,248
  -4,489
  -4,740
  -5,000
  -5,272
  -5,554
  -5,848
  -6,155
  -6,475
  -6,809
  -7,157
  -7,521
  -7,901
Prev. year cash balance distribution, $m
  38
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  25
  30
  34
  40
  45
  51
  58
  64
  71
  79
  87
  95
  103
  112
  121
  131
  141
  151
  162
  173
  185
  197
  209
  222
  236
  250
  265
  280
  297
  313
Cash available for distribution, $m
  1,191
  4,791
  5,174
  5,539
  5,887
  6,216
  6,528
  6,825
  7,109
  7,382
  7,648
  7,908
  8,165
  8,424
  8,685
  8,952
  9,228
  9,515
  9,815
  10,131
  10,464
  10,816
  11,190
  11,587
  12,009
  12,458
  12,935
  13,442
  13,980
  14,552
Discount rate, %
  14.60
  15.33
  16.10
  16.90
  17.75
  18.63
  19.57
  20.54
  21.57
  22.65
  23.78
  24.97
  26.22
  27.53
  28.91
  30.35
  31.87
  33.46
  35.14
  36.89
  38.74
  40.68
  42.71
  44.84
  47.09
  49.44
  51.91
  54.51
  57.23
  60.10
PV of cash for distribution, $m
  1,039
  3,602
  3,307
  2,966
  2,601
  2,230
  1,869
  1,531
  1,226
  958
  732
  545
  396
  280
  193
  129
  84
  53
  32
  19
  11
  6
  3
  2
  1
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  50.0
  36.4
  26.9
  20.2
  15.3
  11.8
  9.1
  7.1
  5.6
  4.5
  3.6
  2.8
  2.3
  1.8
  1.5
  1.2
  1.0
  0.8
  0.7
  0.5
  0.5
  0.4
  0.3
  0.3
  0.2
  0.2
  0.1
  0.1
  0.1
  0.1

East West Bancorp, Inc. is a bank holding company. The Company's principal business is to serve as a holding company for East West Bank (the Bank) and other banking or banking-related subsidiaries. The Bank is a California state-chartered bank, which operates in the United States and Greater China. The Bank provides a range of personal and commercial banking services to businesses, business executives, professionals, and other individuals. It operates through three segments: Retail Banking, Commercial Banking and Other. The Retail Banking segment focuses primarily on retail operations through the Bank's branch network. The Commercial Banking segment primarily generates commercial and industrial (C&I) loans and commercial real estate (CRE) loans through the domestic commercial lending operations in California, New York, Texas, Washington, Massachusetts, Nevada and Georgia, and through the foreign commercial lending operations in China and Hong Kong.

FINANCIAL RATIOS  of  East West Bancorp (EWBC)

Valuation Ratios
P/E Ratio 22.1
Price to Sales 0
Price to Book 2.8
Price to Tangible Book
Price to Cash Flow 14.9
Price to Free Cash Flow 14.9
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate -100%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 17.4%
Total Debt to Equity 17.4%
Interest Coverage 7
Management Effectiveness
Return On Assets 1.5%
Ret/ On Assets - 3 Yr. Avg. 1.5%
Return On Total Capital 11.8%
Ret/ On T. Cap. - 3 Yr. Avg. 10.6%
Return On Equity 13.2%
Return On Equity - 3 Yr. Avg. 13.1%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 0%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 0%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 0%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 0%
Effective Tax Rate 24.5%
Eff/ Tax Rate - 3 Yr. Avg. 26.9%
Payout Ratio 26.9%

EWBC stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the EWBC stock intrinsic value calculation we used $1397 million for the last fiscal year's total revenue generated by East West Bancorp. The default revenue input number comes from 2017 income statement of East West Bancorp. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our EWBC stock valuation model: a) initial revenue growth rate of 17.6% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 14.6%, whose default value for EWBC is calculated based on our internal credit rating of East West Bancorp, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of East West Bancorp.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of EWBC stock the variable cost ratio is equal to 22.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $361 million in the base year in the intrinsic value calculation for EWBC stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for East West Bancorp.

Corporate tax rate of 27% is the nominal tax rate for East West Bancorp. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the EWBC stock is equal to 1.8%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for EWBC are equal to 2574.4%.

Life of production assets of 10 years is the average useful life of capital assets used in East West Bancorp operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for EWBC is equal to -2350.3%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $0 million for East West Bancorp - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 144 million for East West Bancorp is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of East West Bancorp at the current share price and the inputted number of shares is $9.5 billion.

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COMPANY NEWS

▶ East West Bancorp: 2Q Earnings Snapshot   [Jul-19-18 08:15AM  Associated Press]
▶ 5 Best Stocks to Buy on Powell Testimony   [Jul-18-18 06:42AM  Zacks]
▶ Good Stocks To Protect Your Portfolio During A Bear Market   [May-07-18 04:05PM  Simply Wall St.]
▶ East West Bancorp, Inc. to Host Earnings Call   [Apr-19-18 09:30AM  ACCESSWIRE]
▶ East West Bancorp: 1Q Earnings Snapshot   [08:13AM  Associated Press]
▶ East West Bancorp posts 4Q profit   [Jan-25-18 09:10AM  Associated Press]
▶ East West Bancorp At Top End Of Buy Range With Earnings Due   [Jan-17-18 03:00AM  Investor's Business Daily]
▶ East West Bancorp Trying To Close In On Key Technical Benchmark   [Jan-10-18 03:00AM  Investor's Business Daily]
▶ East West Bancorp Shows Rising Relative Strength; Still Shy Of Key Benchmark   [Dec-26-17 03:00AM  Investor's Business Daily]
▶ East West Bancorp Shows Improved Relative Strength; Still Shy Of Benchmark   [Nov-30-17 03:00AM  Investor's Business Daily]
▶ East West Bancorp tops Street 3Q forecasts   [07:02AM  Associated Press]
▶ East West Bancorp Gets RS Rating Upgrade   [Sep-13-17 03:00AM  Investor's Business Daily]
▶ 5 GARP Stocks to Buy for Marvelous Returns   [Aug-28-17 10:16AM  Zacks]
▶ Top 5 GARP Stocks to Scoop Up Right Now   [Aug-10-17 09:51AM  Zacks]
▶ 4 GARP Stocks to Buy for Stellar Returns   [Jul-26-17 10:14AM  Zacks]
▶ East West Bancorp meets 2Q profit forecasts   [Jul-21-17 12:30AM  Associated Press]
▶ 4 GARP Stocks to Buy for a Winning Portfolio   [Jul-11-17 09:50AM  Zacks]
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