Baader Bank confirmed at BUY, TP EUR 8.20 - Good hedge against market shocks and play on volatility
We confirm our BUY recommendation but revise downwards our 12m TP from EUR 10.3 to EUR 8.2Due to its capital market alignment the bank can be regarded as a hedge against adverse macro shocks (O/P European banks index by ~11%) and is a good play on increasing market volatility
In our revised earnings revision based on normalized trading income trajectory vs. extraordinary strong 2020/21, ROE should gradually settle at around 20% territory; Baader shares are still trading at a discount to main peers
The proposed DPS of EUR 0.35 from 2021 earnings (either in the form of scrip dividend or cash) yields nearly 6%.
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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