Baader Bank confirmed at BUY, TP ER 4.9 - Challenging market conditions ahead
We confirm our BUY recommendation but cut our 12m TP from EUR 8.2 to EUR 4.9 as a result of the earnings cut combined with higher COE (accelerated monetary tightening)Following the deeper decline of its main revenue source, trading income, during the H1 22 we have also downgraded the mid-term outlook and see it as a function of decelerated growth in new volumes/accounts and the general normalization in trading activity.
Cost inflation may weigh on Baader Banks efficiency which we reflect in a Cost-Income Ratio hovering around the level of 80%
Upside risks: Cost management, market volatility, stronger growth in new deposit volumes under management
Downside risks: Declining trading activity, regulatory risks
Baader Bank is a securities trading bank. In market making, Co. provides its customers services for pricing, trading and settlement of financial instruments on the global capital markets. In investment banking, Co. concentrates in German, Austrian and Swiss equities. Co. provides institutional investors trading and distribution unit for equities, bonds, futures and options. Co. also advises medium-sized company's inequity and debt capital market transactions such as IPOs, corporate actions, bond issues and the structuring and placement of promissory notes.
The Institutional Equity Research team of Raiffeisen Bank International AG covers 85 stocks from Austria, Central & Eastern Europe with sell-side research and thus levers our local broker status with excellent company relationships. For corporates in Austria, CEE and Western Europe, we offer co-sponsored research, which includes research coverage and marketing activities to investors. Additionally, through our Spotlight Research product we also shed light on leading European small and micro-caps, seeking greater visibility with investors.
The Institutional Equity Research team consists of roughly 15 analysts, both in Vienna and the CEE countries. Our analysts provide long-standing sector expertise in tandem with profound local market know how and a sectoral approach across the entire region.
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