Update
Eagle Bancorp (EGBN)
from Upside, recommended at $15 in Investment Digest issue 715, dated March 14, 2012
Eagle Bancorp retreated 4.3% today despite posting solid September-quarter results. Per-share earnings were $0.44, up 10% and a penny above the consensus. Revenue, which consists of net interest income and noninterest income, also rose 10% and was in line with the two-analyst consensus.
Notably, net interest margin hit 4.31%, up slightly from the June and March quarters but below the prior-year level of 4.44%. Per-share tangible book value was $12.48, up 15%.
With the stock up 56% so far in 2013, Eagle’s pullback today likely reflected profit-taking following the solid but not spectacular quarterly report. And at 16.4 times trailing earnings, shares trade at an 8% premium to their five-year average P/E.
Despite the setback, Eagle remains a solid pick among regional banks based on its profit momentum. Per-share earnings should increase 29% for full-year 2013 and 7% in 2014. Moreover, the stock’s Quadrix Overall score stands at 91, outstripping the industry average of 66. Eagle is a Best Buy.
Richard J. Moroney, CFA, Upside, www.upsidestocks.com, 800-233-5922, October 22, 2013