After the sharp increase in the profitability of the Bank of Cyprus Group in the first quarter of 2006, the international credit rating firms upgraded the bank’s share.
UBS: BOC share at £7.2
The Swiss bank UBS upgraded the PT to £7.2 from £6.3, maintaining Buy 1 Rating.
According to UBS analysts, the Q1 06 net profit up 132% was above their estimates. “Strong earnings growth has been underpinned by strong revenue growth (+25%), exceptionally well contained cost (+2%) reflecting the ongoing restructuring in Cyprus and lower provisions (-9%)”, they added.
UBS also upgraded the 06E/07E/08E forecasts from £0.25/£0.34/£0.45 to £0.28/£0.38/£0.50.
“The way the operating environment evolves vis-à-vis the bank’s positioning both in Greece and Cyprus will continue to underpin strong asset and deposit growth and improving RoA”, the UBS analysts supported.
Deutsche Bank: Share at £5.60
Deutsche Bank increased PT from £5.40 to £5.60, maintaining Buy 1 Rating.
According to its analysts, “Bank of Cyprus has published a good set of result, with a net profit 27% higher than expected. On the back of these results and more details on guidance, we have increased our estimates by 10% for 2006, 6% for 2007 and 4% for 2008”.
P&K Research: Q1 results exceeded our estimates
The positive results of the Bank of Cyprus in the first quarter of 2006 exceeded the estimates of P&K analysts and raised the target price from €8.00 to €10.5.
“We have reduced our estimates for personnel and general expenses in Greece by about 2%-3% going forward and in Cyprus about 1%-2%. Our cost/income ratio has now dropped to 46.1% by 2008 from 51% previously”, the analysts said.
“We see further strengthening in the bank’s position in Cyprus and have raised our loan growth estimate to 13% from 11% previously for 2006”, they added.
P&K Research also increased the growth rate in Greece and Cyprus by 4% and 3% respectively and proceeded to a downward revision of the estimates for bad debts by 10% in 2006 and 6% in 2007.
The firm raised its net profit estimate by 20%, while its ROE estimate has increased to nearly 21% by 2008 from 18% previously.
Keefe, Bruyette & Woods Ltd: Bad debts to drop
The US firm increased the bank’s target price from £4 to £4.75.
According to the report, “the earnings upgrade is mainly due to a lower level of provisions, lower cost in Cyprus and higher other revenues”.
Egnatia: BOC at €9.00
After the publication of the latest BOC results, Egnatia Finance upgraded the target price from €8.10 to €9.00. Egnatia expects that its net profit will increase from £124.6 million (former estimate) to £139.3 million.
“We recall the Bank’s guidance on its revised 2006-2008 strategic business plan, which was issued earlier in February, pointing to a ROE of 18% for 2008, whilst for FY06 the management set a target for £120 million”, the report said.
Conflict of interests
It is worth noting that a possible conflict of interest with the Bank of Cyprus might affect the impartiality of reports.
Investors are urged to consider the reports as one of the factors that determine their investment decision.
UBS: BOC share at £7.2
The Swiss bank UBS upgraded the PT to £7.2 from £6.3, maintaining Buy 1 Rating.
According to UBS analysts, the Q1 06 net profit up 132% was above their estimates. “Strong earnings growth has been underpinned by strong revenue growth (+25%), exceptionally well contained cost (+2%) reflecting the ongoing restructuring in Cyprus and lower provisions (-9%)”, they added.
UBS also upgraded the 06E/07E/08E forecasts from £0.25/£0.34/£0.45 to £0.28/£0.38/£0.50.
“The way the operating environment evolves vis-à-vis the bank’s positioning both in Greece and Cyprus will continue to underpin strong asset and deposit growth and improving RoA”, the UBS analysts supported.
Deutsche Bank: Share at £5.60
Deutsche Bank increased PT from £5.40 to £5.60, maintaining Buy 1 Rating.
According to its analysts, “Bank of Cyprus has published a good set of result, with a net profit 27% higher than expected. On the back of these results and more details on guidance, we have increased our estimates by 10% for 2006, 6% for 2007 and 4% for 2008”.
P&K Research: Q1 results exceeded our estimates
The positive results of the Bank of Cyprus in the first quarter of 2006 exceeded the estimates of P&K analysts and raised the target price from €8.00 to €10.5.
“We have reduced our estimates for personnel and general expenses in Greece by about 2%-3% going forward and in Cyprus about 1%-2%. Our cost/income ratio has now dropped to 46.1% by 2008 from 51% previously”, the analysts said.
“We see further strengthening in the bank’s position in Cyprus and have raised our loan growth estimate to 13% from 11% previously for 2006”, they added.
P&K Research also increased the growth rate in Greece and Cyprus by 4% and 3% respectively and proceeded to a downward revision of the estimates for bad debts by 10% in 2006 and 6% in 2007.
The firm raised its net profit estimate by 20%, while its ROE estimate has increased to nearly 21% by 2008 from 18% previously.
Keefe, Bruyette & Woods Ltd: Bad debts to drop
The US firm increased the bank’s target price from £4 to £4.75.
According to the report, “the earnings upgrade is mainly due to a lower level of provisions, lower cost in Cyprus and higher other revenues”.
Egnatia: BOC at €9.00
After the publication of the latest BOC results, Egnatia Finance upgraded the target price from €8.10 to €9.00. Egnatia expects that its net profit will increase from £124.6 million (former estimate) to £139.3 million.
“We recall the Bank’s guidance on its revised 2006-2008 strategic business plan, which was issued earlier in February, pointing to a ROE of 18% for 2008, whilst for FY06 the management set a target for £120 million”, the report said.
Conflict of interests
It is worth noting that a possible conflict of interest with the Bank of Cyprus might affect the impartiality of reports.
Investors are urged to consider the reports as one of the factors that determine their investment decision.
3287.99
1275.09
