Bank of Cyprus: unjustified valuation gap (stays BUY)
We reiterate our BUY rating on Bank of Cyprus, but revise our 12M price target (PT) to EUR 1.5 (from EUR 1.7), to account for the recent geopolitical risks, direct and indirect exposure to Russia/Ukraine and the updated strategic targets, up to 2025E. The stock is undervalued, in our view, trading at a P/TBV of 0.26x on our 2022E, a large discount of 45-50% vs. its Greek and regional peers, despite the evident turnaround of the business. The bank has already achieved a single-digit NPE ratio, its capital is strong (a TCR of >20%), and it is now restoring the P&L, to lift the ROTE closer to peer levels. Higher EUR interest rates ahead would be a key positive catalyst for the stock, in our view.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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