Bank of Cyprus (BOCH CY) Cyprus
Financials
ResearchGreece was not surprised the bank raised its FY24 RoTE guidance to >24% from >17% following Q2 results (they had been expecting this ever since Q1). Meanwhile, management has announced its decision to list the stock on the ATHEX (and de-list from the LSE) which should improve trading liquidity. ResearchGreece reiterates their OWN IT (OI) rating and raises their TP to €5.8. This comes as the result of their higher estimates in 2024-2026. They expect dividends of €180m-€195m in 2024-2025 on 40% and 50% payout respectively, pointing to a dividend yield of >10% at current prices.
Edition: 193
- 23 August, 2024
Bank of Cyprus (BOCH CY) Cyprus
Financials
The bank has reported a super strong set of Q2 results, driven by the wide(r) loan-deposit rate asymmetry boosting NII +21% Q/Q / +164% Y/Y, with clean RoTE at 25% (vs. 21% in Q1). ResearchGreece raises their 2023 RoTE estimate to 19.6% (vs. management guidance of >17%) and reiterates their OWN IT (OI) rating with a TP of €5.9 (100% upside). Unless earnings are hit by a windfall tax, they expect the 30% minimum pay-out guidance to equal a 9% dividend yield next year and rise closer to 10% by 2025; shareholders will be pocketing c.30% of the bank’s M/Cap in the form of dividends during 2023-25.
Edition: 167
- 18 August, 2023
Greek Equities: Impressive gains YTD
ResearchGreece’s base case scenario is materialising - Mitsotakis administration renewing its mandate and Greece avoiding a recession. With Greek equities +c.35% YTD they provide an update on the investment case for all the stocks under their coverage including:
Jumbo (BELA GA) - Working for the right reasons, namely valuation, balance sheet, management, business model, growth and dividends. The biggest risk: EU-China geopolitical issues affecting the firm's 70% merchandise sourcing.
Mytilineos (MYTIL GA) - Rating seems wrong, but concerns seem right, namely cash flow generation, corporate governance, energy crisis gains, cyclicality and low visibility. TP €17 (50% downside).
Bank of Cyprus (BOCH CY) - The best bank in Greece / Cyprus, worth >1.0x TBV based on RoTE >17% in 2023 (and >13% in 2025) and CoE of 12%. The first bank in the region to resume dividend payments (>8% next year). TP €5.7 (90% upside).
Edition: 164
- 07 July, 2023
Bank of Cyprus (BOCH CY) Cyprus
Financials
Not for turning - Board rejects Lone Star’s latest €1.51 per share offer. What should shareholders do? If you believe BoC’s RoTE will not exceed 5% by 2024 you are better off selling at any price close to €1.50. However, ResearchGreece’s base case scenario is that BoC’s RoTE will reach 7.5% in 2024 and rise to 8.3% in 2025 (both of which are below management guidance) and calculates the equity is worth €2.08-€2.19 per share (60%-70% upside). Sees no reason for the bank to trade below the average 0.43x P/TBV 2023E of its Greek peers or even below the 0.50x-0.54x of best NPE/CET1 positioned Eurobank and National Bank of Greece.
Edition: 143
- 02 September, 2022