BRD-GSG confirmed at BUY, TP RON 14.8 - A pile of money distributed ahead of the macro slowdown
We maintain the BUY recommendation for BRD-GSG with a new 12 months target price of RON 14.8 (previous RON 20.5), as we consider the price correction (-32% ytd) too steep for the current business environment and this years generous dividend distributions (DY 20.9%, considering the price from December 30, 2021 of RON 17.7).In the short and medium term, we see an improvement in the NIM as a result of tightening monetary policy (Raiffeisen Research expects a key interest rate of 7% at the end of this year) and the high exposure on variable interest rates loans (almost 70% of the loan portfolio).
However higher interest rates will come with higher risks. Thus, we have increased our expectations regarding CoR, NPLs ratio and CoE. At the same time, we also changed the rate of growth in perpetuity by 50 bps, to 3.5%.
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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