• In the past quarter, WaFd, Inc. reported adjusted earnings of US$0.83 per share, topping analyst estimates as higher net interest and non-interest income offset pressures from lower loans and deposits, rising expenses, and softer credit quality, while the bank also repurchased 2.74 million shares.
• At the same time, WaFd posted its first quarter of net loan growth in over a year, driven by a strong rebound in its actively managed commercial and industrial portfolio, aligning with its Build 2030 push to become a more business-focused bank.
• Next, we’ll examine how this return to active loan growth, particularly in commercial and industrial lending, may influence WaFd’s investment narrative.

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WaFd Investment Narrative Recap

To own WaFd, you need to believe in its shift toward higher yielding business banking while it manages credit and funding risks. The latest quarter’s earnings beat, share buybacks, and return to net loan growth support that transition, but softer credit quality and higher expenses keep near term asset quality and cost control as the key swing factors. Overall, this news does not appear to materially change the biggest risks or the core Build 2030 catalyst.

The most relevant update here is WaFd’s first quarter of net loan growth in over a year, driven by a rebound in its actively managed commercial and industrial book. That aligns directly with the Build 2030 aim to grow the active loan portfolio and tilt further into business lending, a catalyst that could matter more if deposit mix and credit costs move in the right direction alongside that growth.

Yet even with improving C&I momentum, investors should be aware of how softer credit quality could...

WaFd's narrative projects $886.1 million revenue and $269.3 million earnings by 2028. This requires 7.3% yearly revenue growth and about a $57.9 million earnings increase from $211.4 million today.

Uncover how WaFd's forecasts yield a $31.00 fair value, a 12% downside to its current price.

Exploring Other Perspectives

Three fair value estimates from the Simply Wall St Community span roughly US$31 to US$37 per share, showing how differently individual investors view WaFd’s potential. You can weigh those views against WaFd’s push into higher yielding commercial and industrial loans, which could be an important driver of how its earnings power evolves over time.

Explore 3 other fair value estimates on WaFd - why the stock might be worth 12% less than the current price!

Decide For Yourself

Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts.

• A great starting point for your WaFd research is our analysis highlighting 3 key rewards that could impact your investment decision.
• Our free WaFd research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate WaFd's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.