Natixis: UBS upgrades to 'buy'
(CercleFinance.com) - UBS has changed its mind about the share of French banking group Natixis, which lost over a quarter of its value in the space of one month after doubts about one of its asset management companies, H2O.
Believing the sanction to be excessive, analysts have now upgraded their rating on the stock to “buy,” against "neutral" previously. However, the broker has reduced its 12-month target price from 4.8 euros to 3.9 euros, although this lower target price still leaves upside potential of over 10%.
The broker's research note highlights Natixis' asset-light business model and its ability to pay out over 60% of its profits in dividends, one of the highest rates in its sector, as well as a favourable historic payout. Press disclosures and outflow of funds at H2O have plunged the Natixis stock to the point that its asset management business is now, according to UBS, 33% discounted relative to its sector.
Another of UBS' calculations is that at its current price, Natixis shares factor in a decline of more than 15% (about 140 billion euros) of its assets under management, which is an extreme scenario that seems very unlikely.
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The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
Believing the sanction to be excessive, analysts have now upgraded their rating on the stock to “buy,” against "neutral" previously. However, the broker has reduced its 12-month target price from 4.8 euros to 3.9 euros, although this lower target price still leaves upside potential of over 10%.
The broker's research note highlights Natixis' asset-light business model and its ability to pay out over 60% of its profits in dividends, one of the highest rates in its sector, as well as a favourable historic payout. Press disclosures and outflow of funds at H2O have plunged the Natixis stock to the point that its asset management business is now, according to UBS, 33% discounted relative to its sector.
Another of UBS' calculations is that at its current price, Natixis shares factor in a decline of more than 15% (about 140 billion euros) of its assets under management, which is an extreme scenario that seems very unlikely.
Copyright (c) 2019 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.