Komercni Banka: safe harbour for yield seekers (stays BUY)
We have updated our 2023-24E forecasts for Komercni Banka and included the latest 2023E guidance from management. We have also rolled our model over to 2025E. Our updated 12M price target (PT) lands at CZK 837/share currently (down from CZK 913). Such a PT level still offers sufficient upside to yield a BUY rating, but we admit that Komercni Banka is not at the top of our pecking order when it comes to the CEE banking space. In part, our positive rating on Komercni is a function of our continuously positive stance on the CEE banking sector. We continue to like Komercni Banka for its inexpensive valuation, with its 2023E P/BV just 1.0x (vs. the 5Y 12M FWD consensus average of 1.2x) and 2023-24E P/Es of 8.4-8.6x (5Y 12M FWD consensus average at 11x). As Komercni Banka is one of the most sustainable dividend payers among the regional banks, we see this as a key attraction; at its current moderate valuation, the yield is almost 8%.Komercni banka is a universal banking group based in the Czech Republic. Co. is engaged in the provision of a range of financial services in retail, corporate and investment banking. Co.'s operating segments include: Retail Banking, the provision of products and services to individuals, such as among others building savings, pension insurance, overdrafts, credit card and personal loans and mortgages; Corporate Banking, the provision of products and services to corporate entities such as foreign currency and derivative products, syndicated and export financing, and guarantee transactions; and Investment Banking, which involves trading in financial instruments.
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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