07/01/2009 15:41
In its report on the European banking sector released today, Keefe, Bruyette & Woods (KBW) cut the TP of Bank of Cyprus and Marfin Popular Bank. Specifically, the new TP for BOCY is €4.2 from €5.1 (-17.6%) and for Marfin €3.2 from €3.8 (-15.8%).
“We believe investors should steer clear of bank stocks perceived as super defensive, that significantly outperformed during 2008 and that now trade at a material valuation premium to the industry (HSBC, Handelsbanken and Sabadell). Instead, we think they should focus on attractively valued, relatively defensive plays (BNP Paribas, Mediobanca, UBI Banca, Alpha Bank), and for brave investors, there are some ultra-cheap beta plays (DnB NOR, Commerzbank), the report said.
“However, our key concerns regarding funding markets, asset quality deterioration and the pressure to recapitalise make it hard to be bullish. We therefore maintain our neutral stance on the sector and await an improvement in key indicators that might act as a positive catalyst for bank share prices”, KBW noted.
“We believe investors should steer clear of bank stocks perceived as super defensive, that significantly outperformed during 2008 and that now trade at a material valuation premium to the industry (HSBC, Handelsbanken and Sabadell). Instead, we think they should focus on attractively valued, relatively defensive plays (BNP Paribas, Mediobanca, UBI Banca, Alpha Bank), and for brave investors, there are some ultra-cheap beta plays (DnB NOR, Commerzbank), the report said.
“However, our key concerns regarding funding markets, asset quality deterioration and the pressure to recapitalise make it hard to be bullish. We therefore maintain our neutral stance on the sector and await an improvement in key indicators that might act as a positive catalyst for bank share prices”, KBW noted.
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