UniCredit: Berenberg downgrades to 'hold' on strategy change
(CercleFinance.com) - UniCredit shares fell on Wednesday, after Berenberg downgraded Italy's biggest lender to "hold" from "buy", saying that the bank's strategy is now moving in a new direction.
"One of the key reasons we liked UniCredit was that the CEO, Jean Pierre Mustier, had abandoned the bank's old strategy of targeting growth, instead favouring a reduction in cost and risk," Berenberg said in a note.
"Having resigned from his role on Monday following a disagreement over the strategic direction of the bank, we believe this strategy is now in doubt," the German broker added.
Berenberg wrote in its report that this new direction will probably involve M&A and most likely a deal for Banca Monte dei Paschi di Siena (BMPS), which means Berenberg sees "no reason to be involved in the name."
The broker also cut its target price on UniCredit from 9.5 euros to 8 euros.
The shares were trading lower 1.8% on Wednesday.
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