Inbox: Raiffeisen-Analysten bullish auf Erste Group-Aktie

Erste Group

Akt. Indikation: 115.60 / 115.70
Uhrzeit: 11:53:48
Veränderung zu letztem SK: -0.73%
Letzter SK: 116.50 ( 0.26%)

07.11.2017

Zugemailt von / gefunden bei: RCB (BSN-Hinweis: Lauftext im Original des Aussenders, Titel (immer) und Bebilderung (oft) durch boerse-social.com aus dem Fotoarchiv von photaq.com)

Erste Group raised to BUY, TP EUR 40.0 - Same outlook, different year

3Q ahead of our and consensus estimates on low risk costs; core earnings in line
Similar to last year market seems disappointed with the undemanding guidance for next year; this could provide an entry opportunity (similar to last year)
Obvious turn around in Czech rates to support NIM
Chance for lower corporate income tax in Austria with the new government
Management committed on rising pay-out ratio above 13% target CET1
We only fine-tune our estimates, keep our TP of EUR 40 unchanged and thus change our recommendation from HOLD to BUY

Erste delivered solid 3Q earnings characterised by very low risk costs in most countries and core earnings in line with estimates on a group level. Similar to last year the market seems disappointed by the undemanding new guidance for next year, thus leading to a correction of the share price last Friday. We believe that similar to last year this share price weakening provides an entry opportunity and thus upgrade our recommendation from HOLD to BUY while confirming our target price of EUR 40.

On our TP Erste trades at 1.4x Tangible Book Value and at an ROTE of 11.0% (assumed stable 17-19e), which should be justified assuming COE of 6.5% in 2018 and 8.1% in our TV assumption. An even lower COE might be justified looking at Erstes recent AT1 pricing development. Supported by the recent S&P upgrade Erstes AT1 price increased significantly thus compressing the yield to call to currently 3.25% and the swap spread to below 300 bps.

We see the obvious turnaround in Czech rates (evidenced by last weeks second rate hike) as supportive for the expected NII turnaround (CZ rate sensitivity: EUR 20 mn p.a. for a 25 bps rate hike) despite ongoing headwinds from the amortising bond book in EUR countries. Thus we forecast the cost/income ratio to improve by >150 bps as opex should remain flat (we forecast a 1.4% increase) supported by lower IT/project costs related to regulatory projects to be finalised in 2018, thus compensating for a wage uplift in some CEE countries. Given management statements underlining that the 10%+ ROTE guidance refers to a floor we feel confident with our 11% 2018e ROTE forecast and thus only fine-tuned our model assumptions without a bottom-line change. We have further reduced our COR assumptions to 12 bps for 2017e/24 bps for 2018e and expect the group to reach the previous COR guidance of 30 bps only in 2019e.

A reduced corporate tax rate for retained earnings in Austria has been mentioned in the campaigning programs of the two parties currently in coalition talks (ÖVP and FPÖ). While we do not include a change of the tax code in our forecast, a potential 50% cut of the corporate tax rate for retained earnings (as stated in the FPÖ program, ÖVP suggested a full tax relief for retained earnings) might lead to a positive EPS impact of ca. 3-4% based on our calculation.

The CET1 ratio dropped to 12.8% (from 13.2%) and to 12.4% on a FL basis due to a one-off op-risk RWA uplift (management expects a reversal of this effect in 2018) and IRB model implementation in RO as well as non-inclusion of 3Q profits. Management guides for a 13%+ CET1 as of year-end and expressed increased confidence in a 13% CET target ratio and therefore reiterated its expectations of a rising DPS going forward. We leave our DPSe unchanged.

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Erste Group

Mitglied in der BSN Peer-Group Banken
Show latest Report (04.11.2017)

Im ATX auf Pos. 8 (bezogen auf YTD %).

Platz 1 im Umsatzranking YTD im ATX.

Gernot Mittendorfer (CFO) Andreas Treichl (CEO) Thomas Sommerauer (IR) Petr Brávek (Board Member) Peter Bosek (Board Member) Jozef Síkela (Board Member) Andreas Gottschling (Board Member)

Für Zusatzliquidität im Orderbuch der Erste Group-Aktien sorgen die Erste Group Bank AG als Specialist sowie die Market Maker Wood & Company Financial Services, Hudson River Trading Europe, Raiffeisen Centrobank AG, Société Générale S.A., Tower Research Capital und Virtu Financial Ireland Limited, Klick auf Institut/Bank öffnet Übersicht.

Erste Bank, Bankomat, Fotocredit: Erste Bank

Aktien auf dem Radar:Porr, Kapsch TrafficCom, Flughafen Wien, EuroTeleSites AG, RHI Magnesita, Austriacard Holdings AG, OMV, Telekom Austria, voestalpine, Verbund, SBO, Lenzing, Strabag, FACC, Bawag, Andritz, Addiko Bank, Frequentis, RBI, Semperit, BKS Bank Stamm, Marinomed Biotech, Amag, CPI Europe AG, Österreichische Post, UBM, IBM, Goldman Sachs, Commerzbank, Fresenius Medical Care, Mercedes-Benz Group.

(BSN-Hinweis: Lauftext im Original des Aussenders, Titel (immer) und Bebilderung (oft) durch boerse-social.com aus dem Fotoarchiv von photaq.com)

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Inbox: Raiffeisen-Analysten bullish auf Erste Group-Aktie

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