In a report released today, Pamela Zuluaga from Morgan Stanley downgraded Banco Comercial Portugues (0RJN – Research Report) to a Hold, with a price target of €0.58.
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Pamela Zuluaga’s rating is based on a combination of factors including the bank’s earnings resilience and capital allocation strategy. Despite raising the net profit forecast slightly for the upcoming years due to strong net interest income and lower provisioning, there is a cautious outlook on the bank’s excess capital optionality. Management has indicated that excess capital will be retained for future loan growth rather than increasing payout targets, reducing the likelihood of distribution surprises.
Additionally, the bank’s stock has already experienced significant growth, approximately doubling in the past year, which limits further upside potential. While Banco Comercial Portugues demonstrates robust earnings resilience, the limited optionality for capital distribution and the recent stock performance have led to the decision to change the recommendation from Overweight to Equal-weight, resulting in a Hold rating.
According to TipRanks, Zuluaga is ranked #298 out of 9400 analysts.