Eastern Bankshares (NASDAQ:EBC) Shares Gap Down on Disappointing Earnings

Key Points

• Earnings miss and market reaction: Eastern Bankshares reported Q EPS of $0.40 versus $0.44 expected and revenue of $295.9M vs. $308.7M expected, causing the stock to gap down from $20.51 to an opening price of $19.71 on heavy volume (~1.7M shares).
• Analyst and institutional positioning: Despite the miss, the consensus rating is a Moderate Buy with a $22.75 target as several firms raised targets or started coverage, and institutional investors now own about 71.68% of the stock after large stake increases by major funds.

Shares of Eastern Bankshares, Inc. (NASDAQ:EBC - Get Free Report) gapped down before the market opened on Friday after the company announced weaker than expected quarterly earnings. The stock had previously closed at $20.51, but opened at $19.71. Eastern Bankshares shares last traded at $19.6450, with a volume of 1,706,073 shares trading hands.

The company reported $0.40 earnings per share for the quarter, missing analysts' consensus estimates of $0.44 by ($0.04). The company had revenue of $295.90 million during the quarter, compared to analyst estimates of $308.68 million. Eastern Bankshares had a net margin of 8.32% and a return on equity of 8.25%.

Analysts Set New Price Targets

A number of equities analysts have weighed in on EBC shares. Barclays lifted their price target on shares of Eastern Bankshares from $22.00 to $23.00 and gave the company an "equal weight" rating in a report on Tuesday, April 7th. Weiss Ratings reiterated a "hold (c)" rating on shares of Eastern Bankshares in a report on Friday, March 27th. TD Cowen lifted their price target on shares of Eastern Bankshares from $23.00 to $24.00 and gave the company a "buy" rating in a report on Monday, January 26th. Hovde Group started coverage on shares of Eastern Bankshares in a report on Monday, January 5th. They issued an "outperform" rating and a $22.50 price target on the stock. Finally, Stephens started coverage on shares of Eastern Bankshares in a report on Wednesday, April 15th. They issued an "overweight" rating and a $24.00 price target on the stock. One research analyst has rated the stock with a Strong Buy rating, four have assigned a Buy rating and three have issued a Hold rating to the company's stock. Based on data from MarketBeat.com, Eastern Bankshares has a consensus rating of "Moderate Buy" and a consensus target price of $22.75.

Insider Activity at Eastern Bankshares

In related news, CAO David Andrew Ahlquist sold 10,000 shares of Eastern Bankshares stock in a transaction on Thursday, February 5th. The shares were sold at an average price of $21.65, for a total transaction of $216,500.00. Following the transaction, the chief accounting officer owned 9,518 shares in the company, valued at approximately $206,064.70. The trade was a 51.23% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which can be accessed through this link. Also, CFO R David Rosato bought 5,000 shares of Eastern Bankshares stock in a transaction that occurred on Thursday, March 5th. The shares were acquired at an average price of $19.17 per share, for a total transaction of $95,850.00. Following the acquisition, the chief financial officer directly owned 45,000 shares in the company, valued at approximately $862,650. This represents a 12.50% increase in their position. Additional details regarding this purchase are available in the official SEC disclosure. Company insiders own 1.26% of the company's stock.

Hedge Funds Weigh In On Eastern Bankshares

Several hedge funds and other institutional investors have recently made changes to their positions in EBC. Wellington Management Group LLP lifted its holdings in shares of Eastern Bankshares by 185.9% during the 4th quarter. Wellington Management Group LLP now owns 7,437,108 shares of the company's stock valued at $137,066,000 after acquiring an additional 4,835,474 shares in the last quarter. T. Rowe Price Investment Management Inc. lifted its holdings in shares of Eastern Bankshares by 33.0% during the 4th quarter. T. Rowe Price Investment Management Inc. now owns 13,728,558 shares of the company's stock valued at $253,018,000 after acquiring an additional 3,407,066 shares in the last quarter. Vanguard Group Inc. lifted its holdings in shares of Eastern Bankshares by 12.6% during the 4th quarter. Vanguard Group Inc. now owns 21,874,030 shares of the company's stock valued at $403,138,000 after acquiring an additional 2,440,017 shares in the last quarter. Norges Bank acquired a new position in shares of Eastern Bankshares during the 4th quarter valued at $33,548,000. Finally, State Street Corp increased its stake in Eastern Bankshares by 18.5% during the 4th quarter. State Street Corp now owns 8,919,404 shares of the company's stock worth $164,385,000 after buying an additional 1,389,304 shares during the period. Institutional investors and hedge funds own 71.68% of the company's stock.

Eastern Bankshares Price Performance

The stock has a market cap of $4.62 billion, a PE ratio of 48.01 and a beta of 0.76. The company has a current ratio of 0.91, a quick ratio of 0.91 and a debt-to-equity ratio of 0.05. The company's 50 day moving average is $19.98 and its 200-day moving average is $19.30.

Eastern Bankshares Company Profile

Eastern Bankshares, Inc is the bank holding company for Eastern Bank, one of the oldest and largest mutual banks in the United States. Founded in 1818 as Salem Savings Bank and later rebranded as Eastern Bank in 1989, the company preserved its mutual ownership structure for more than two centuries. In March 2020, it completed an initial public offering and began trading on the Nasdaq under the ticker EBC, while continuing to emphasize its community-focused heritage.

Through its primary subsidiary, Eastern Bank, the company delivers a broad range of commercial and consumer banking products.

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