Societe Generale: JPMorgan upgrades rating to 'overweight
(CercleFinance.com) - JPMorgan has raised its recommendation on Societe Generale shares from 'Neutral' to 'Overweight', with the target price also raised from 29 to 46 euros.
The research firm bases its decision on the French banking group's improved profitability and the payout it is offering its shareholders, factors which they believe are likely to prolong the current upward trend in the share price.
JPMorgan acknowledges in its note that "SocGen shares have already performed strongly over the last four months, thanks to improved capital visibility and better communication, but above all to the appointment of a new CFO and his message on shareholder payouts, both of which have surprised us".
With a valuation of 5.6 times earnings deemed "undemanding", the market is, in its view, underestimating the positive momentum driving business in corporate and investment banking, the improvement in BoursoBank's profitability and the strengthening of its asset quality.
As a result, analysts see potential for further upside due to the upward revision of market earnings forecasts and an increase in distributions to shareholders.
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