Northwest Bancshares, Inc. (NWBI) Appreciation Can Be Seen As An Exit Opportunity

Northwest Bancshares, Inc. (NASDAQ:NWBI) has been downgraded by Sandler O’Neill on December 19 which now rates the stock as Sell compared with Hold rating suggested in the past. Analysts at FBR & Co., maintained the company shares at Mkt Perform on October 26 but switched target price from $15 to $16. Brokerage firm FBR Capital, looks cautious as they stick to prior recommendation of Mkt Perform, in a call on July 26. However, they did change the target price from $14 to $15. FBR Capital, released new analyst coverage on June 02, calling the stock is Mkt Perform.

iShares Core S&P Smallcap ETF revealed as top hedge fund owner in Northwest Bancshares, Inc. (NWBI) with a stake of over 6M NWBI shares as of February 27, with a market value of approx. $111.53M as of today. The second largest holder, DFA U.S. Small Cap Value Series, with 2.66M shares which equates to $42.96M worth of the stock. At third is Vanguard Small-Cap Index Fund, which stood pat with 2.36M shares, a 2.3% position in Northwest Bancshares, Inc., worth $40.88M. The insider holding in stood at 0.3% while institutions hold 74.2%.

NWBI stock rose 1.36% in recent trade and currently has a stock-market value of $1.78B. The shares finished at $17.12, after trading as low as $16.87 earlier in the session. It hit an intraday high Wednesday at $17.12. Trading activity significantly weakened as the volume at ready counter decreased to 428,298 shares versus 612,235 in average daily trading volume over the past 20 days. So far this year, the volume has averaged about 565,246 shares. The stock is now 10.45% above against its bear-market low of $15.5 on October 24, 2018. It has retreated -9.87% since it’s 52-week high of $18.81 reached in February. Now the market price is up 3.63% on the year and up 1.06% YTD.

It has been reported that multiple insider activity took place at Northwest Bancshares, Inc. (NWBI). Sr. EVP-Chief Revenue Officer FISHER STEVEN G sold 35,205 shares for $328,171 in transaction occurred on 2019/02/28. After making this transaction, Sr. EVP-Chief Revenue Officer owns a direct stake of -8 shares, worth $5,618,293, as per the last closing price.

Director, Tredway Philip M had divested 39,210 shares for $16,260 through a trade on 2019/02/08. Following this activity, the insider holds -5 shares worth $278,371 as of recent close.

Northwest Bancshares, Inc. (NWBI)’s 50 day simple moving average (SMA 50) price is $17.66 and its 200-day simple moving average (SMA 200) price is $17.52. The company’s stock currently has a total float of 96.52M shares. Its weekly volatility is hovering around 1.36% and felt 1.63% volatility in price over a month. On the upside, the share price will test short term resistance at around $17.2. On a downside, the stock is likely to find some support, which begins at $16.95. The failure to get near-term support could push it to $16.79.

When looking at valuations, Northwest Bancshares, Inc. (NWBI) has a cheap P/E of 16.8x as compared to industry average of 19.92x. Moreover, it trades for 15.75 times the next 12 months of expected earnings. Also, it is trading at rather expensive levels at just over 1.4x price/book and 4.74x price/sales. Compared to others, Northwest Bancshares, Inc. is in a different league with regards to profitability, having net margins of 28.1%. To put some perspective around this, the industry’s average net margin is 32.83%. NWBI’s ROE is 8.5%, which is also considerably worse than the industry’s ROE of 16.71%.

Shares of NWBI have dropped -7.4% since the company’s most recent earnings report. Over the past 12 fiscal quarters, Northwest Bancshares, Inc. (NASDAQ:NWBI) has topped consensus earnings estimates in 4 quarters (33%), missed earnings in 6 quarters (50%), whereas at 2 occasion EPS met analyst expectations. NWBI last reported earnings that receded expectations. The company raked in $0.26 per share, -92.97% change on the same period last year. That was worse than consensus for $0.27. Revenue for the recent quarter stood at $86.83 million, up 3% on last year and above the $86.46 million predicted by analysts. For this quarter, Wall Street analysts forecast revenue in a range of $91.97 million to $93.52 million, which should be compared with $86.88 million generated last year. EPS is seen in a range of $0.26 to $0.28, against the $0.26 reported a year ago.