BRD-GSG: How much capital is too much? (stays BUY)
We maintain our positive view on BRD-GSG, increasing our price target (PT) to RON 18.5/share, from RON 15.3/share previously, and keeping our BUY rating. The stock is up c.15% since our upgrade in September 2020, when we flagged its huge capital accumulation and the potential to pay out large dividends. We believe that the re-rating is likely to continue, in view of its large excess capital and potential to pay out a dividend in 4Q21E (or when the regulators give the green light) of >30% of the current market capitalisation. The large dividend payment is needed, in our view, to unlock value and normalise the ROTE to levels closer to 14-15%.
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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