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Crédit Agricole SA: UBS upgrades to 'buy'

(CercleFinance.com) - This morning UBS upgraded its "neutral" rating on the Crédit Agricole SA (CASA) share to “buy”.

Analysts have also made the stock its best pick in the French banking sector, even though they have trimmed their target price from 16 euros to 15.5 euros, meaning upside potential of just over 10%.

Analysts distinguish the bank for its diversified nature and capitalisation multiples, while its profitability is expected to improve in the coming years. However, the CASA share has been lagging those of other French banks since the start of 2018.

Its 2019 P/E, which is estimated at 9.8x (9x excluding Amundi, meaning an estimated discount of 10% relative to its sector), is considered as too low by UBS, in that it does not fairly reflect a business model that is bound to become significantly more profitable and less capital-intensive.

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