Hope Bancorp (HOPE) Stock Forecast & Price Target

Hope Bancorp Inc. demonstrates a robust financial position with improved non-performing loan (NPL) coverage increasing to 166% and positive credit migration evidenced by a decrease in criticized assets and non-performing assets. The projected high single-digit total loan growth for 2025, supported by moderate organic loan growth and the upcoming merger with TBNK, is likely to enhance the bank's deposit base and overall lending capacities. Additionally, the company's ability to achieve better-than-expected earnings per share (EPS) through lower provisions, higher fees, and reduced expenses further solidifies its favorable outlook.

Hope Bancorp's stock faces a negative outlook primarily due to a decline in net interest income (NII), which fell by 2.6% sequentially, largely attributed to a reduction in average earning assets and a contracting net interest margin (NIM) that decreased to 2.50%. The company has experienced a significant drop in loan yields by 21 basis points quarter-over-quarter, exacerbated by rising funding costs and a sluggish loan demand which further pressures profitability. Additionally, the forecast for 2025 indicates a lower level of NII than previously expected, impacting the earnings per share outlook and raising concerns over the bank's asset quality and competitive positioning in the market.