First Hawaiian (FHB) Stock Forecast & Price Target

First Hawaiian Inc. demonstrates a robust financial outlook, driven by a net interest margin (NIM) increase of 8 basis points to 3.03%, attributed to a favorable funding mix and lower deposit rates. With loans growing at a 5% annual pace to $14.4 billion, particularly in commercial real estate (CRE) and commercial and industrial (C&I) sectors, the company is positioned for continued growth in its core banking segments. Additionally, the expectation of further NIM expansion to approximately 3.06% in 1Q25 and a projected 3.17% for FY 2026 underscores a solid trajectory for First Hawaiian's profitability and operational efficiency.

The outlook for First Hawaiian Inc remains negative due to several fundamental challenges, including the decrease in the CET1 ratio from 13.0% to 12.8%, primarily attributable to capital return strategies, which raises concerns about financial resilience. Additionally, the forecast for core efficiency appears to shift slightly lower amid risks from a potentially weak local real estate market, reduced tourism, and increased regulatory and technology costs, all exacerbated by a potentially volatile rate environment. Furthermore, management’s guidance indicates that fee income is expected to normalise at around $51 million per quarter, suggesting a stagnation in growth, while operating costs are projected to rise by 2% to approximately $510 million in 2025, further impacting profitability.