Sberbank: Less compelling at peak P/E and 1x book (downgraded to HOLD)
We have downgraded Sber to HOLD (from Buy) and revised our price target (PT) to RUB 223/share (from RUB 286/share). The commons are trading at 9.4x P/E and 1.0x P/TBV, on our 2020E forecasts. We estimate that Sber is trading at a peak next-year P/E multiple and at a very similar 2020E P/TBV to Komercni and OTP, which indicates a significant rerating vs. its peers during the COVID-19 crisis. Combined with the limited upside in our intrinsic valuation, we believe that the relative rerating in the commons indicates that the stock is not as compelling. We have also revised our estimates, and take a deep dive into the NIM, the asset quality and the opex.Sberbank Russia is an open joint stock commercial bank. Co.'s principal business activity is corporate and retail banking. This includes, but is not limited to, deposit taking and commercial lending in freely convertible currencies, local currencies of countries where the subsidiary banks operate and in Russian Roubles, support of clients' export/import transactions, foreign exchange, securities trading, and trading in derivative financial instruments. Co.'s operations are conducted in both Russian and international markets. As of Dec 31 2014, Co. had total assets of RUB25.20 trillion.
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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