UBI Banca: Credit Suisse downgrades buy rating
(CercleFinance.com) - Credit Suisse has downgraded its "outperform" rating on the share of the Italian banking group UBI this morning, considering that the difficult sessions that the share had in May, due to political uncertainties in Italy, probably do not belong to the past.
The broker has therefore cut its target price from 4.85 euros to 3.70 euros (-23.7%).
The broker is reducing its earnings estimates (by around -10% from 2018 to 2020, ed.) and its target prices in the sector, to take into account the potential slowdown in the Italian economy, due to concerns about the financial sustainability of the programs of the government associating the League with the 5 Stars Movement, its research report laments. The Conte cabinet could well "derail" the trajectory of Italian public debt.
Credit Suisse believes that this context is likely to reduce banking activity in Italy, as well as asset management fees. Not to mention that the downward trend in banks' exposure to "non-performing" assets, such as bad loans, is likely to run out of steam, particularly in the case of UBI Banca. Finally, risk provisions should be increased.
Copyright (c) 2018 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.
The broker has therefore cut its target price from 4.85 euros to 3.70 euros (-23.7%).
The broker is reducing its earnings estimates (by around -10% from 2018 to 2020, ed.) and its target prices in the sector, to take into account the potential slowdown in the Italian economy, due to concerns about the financial sustainability of the programs of the government associating the League with the 5 Stars Movement, its research report laments. The Conte cabinet could well "derail" the trajectory of Italian public debt.
Credit Suisse believes that this context is likely to reduce banking activity in Italy, as well as asset management fees. Not to mention that the downward trend in banks' exposure to "non-performing" assets, such as bad loans, is likely to run out of steam, particularly in the case of UBI Banca. Finally, risk provisions should be increased.
Copyright (c) 2018 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.