BBVA: Credit Suisse upgrades to 'neutral' on US unit sale
(CercleFinance.com) - Credit Suisse has upgraded the BBVA share to "neutral" from "underperform," while raising its target price to 3.
90 euros from 2.40 euros previously, citing the sale of the firm's US business.
"The long-term underperformance in BBVA's US subsidiary was structural, with higher cost of funding, lower fee income and higher costs (compared to scale companies in the US) making a sale a good strategic move," the broker pointed out in a note to clients.
The sale will enable the Madrid-based lender to refocus on its domestic Spanish business, with BBVA confirming that it has begun talks to merge with rival Banco de Sabadell, it added in the report.
Credit Suisse now assumes BBVA will pay a dividend equivalent to 35% of its earnings, on top of a share buyback equivalent to 20%-30% of earnings.
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The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
90 euros from 2.40 euros previously, citing the sale of the firm's US business.
"The long-term underperformance in BBVA's US subsidiary was structural, with higher cost of funding, lower fee income and higher costs (compared to scale companies in the US) making a sale a good strategic move," the broker pointed out in a note to clients.
The sale will enable the Madrid-based lender to refocus on its domestic Spanish business, with BBVA confirming that it has begun talks to merge with rival Banco de Sabadell, it added in the report.
Credit Suisse now assumes BBVA will pay a dividend equivalent to 35% of its earnings, on top of a share buyback equivalent to 20%-30% of earnings.
Copyright (c) 2020 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.