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Bank of Hawaii Hits All Time High: Is More Upside Left?

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Bank of Hawaii Corporation's (BOH - Free Report) shares hit all time high of $89.72 within first hour of trading on Dec 29. Notably, the stock closed the day at $88.64, reflecting a return of 40.9%, over the last one year.  The shares have outpaced the Zacks categorized West Banks industry’s gain of 32.5%.

Since the election results in November, shares of this Zacks Rank #2 (Buy) stock has been trending up. The stock seems to be riding on the Trump rally, and the Fed rate hike further cheered the investors.

Also, the stock has been witnessing upward estimate revisions. The Zacks Consensus Estimate have risen 1.9% and 2.2% for 2016 and 2017, respectively, over the last 90 days.



So, will this bullish trend for Bank of Hawaii continue in 2017? Let’s check the company fundamentals before deciding.

Earnings Strength: Bank of Hawaii has witnessed 16.6% growth in earnings per share (EPS), over the last three to five years. Notably, earnings are estimated to grow at the rate of 14.5% for 2016 compared with the industry average of 8.6%.

In addition, the company’s long-term (3–5 years) estimated EPS growth rate of 8.5% promises rewards for investors, over the long run.

Revenue Growth: Bank of Hawaii’s net revenue has risen at a compounded annual growth rate (“CAGR”) of 3.2%, over the last three years (2013–2015). This reflects impressive loan and deposit growth. Further, the company’s projected sales growth of 6.5% for 2016 (compared with industry average of 3%) ensures continuation of the upward revenue trend.

Superior ROE: Bank of Hawaii’s Return on Equity (ROE) ratio is 14.35% compared with the industry average of 9.24%. This indicates that the company reinvests more efficiently compared to the industry.

Stock Looks Overvalued: Bank of Hawaii seems overvalued with respect to its respective Price-to-Earnings (P/E) and Price-to-Book (P/B) ratios. The company’s P/E ratio of 21.05 is in line with the industry average. Its P/B ratio of 3.26 is above the industry average of 1.75.

Further, the stock has a Value Style Score of ‘C.’ The Value Style Score condenses all valuation metrics into one actionable score that helps investors steer clear of ‘value traps’ and identify stocks that are truly trading at a discount. Our research shows that stocks with Style Scores of ‘A’ or ‘B,’ when combined with Zacks Rank #1 (Strong Buy) or #2, offer the best upside potential.

Leverage: Bank of Hawaii’s debt/equity ratio stands at 0.23 compared with the industry average of 0.16, indicating higher debt level relative to the industry.

Other Stocks Worth a Look

Other stocks worth considering in the financial sector include Carolina Financial Corporation , Farmers Capital Bank Corporation and Commerce Bancshares, Inc. (CBSH - Free Report) .

Carolina Financial is projected to record 2.6% year-over year-increase in earnings for 2016. Also, its share price is up 69.3%, over the last one year. It currently boasts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Farmers Capital Bank carries a Zacks Rank #2 and is estimated to witness 2.6% rise in 2016 earnings. Moreover, over the last one year, its share price is up over 56.8%.

Commerce Bancshares carries a Zacks Rank #2 and is likely to record 8.5% year-over-year increase in 2016 earnings. Further, its share price has risen 42.5%, over the last one year.

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