Commerzbank (CBK GR) Germany
Financials
Not so boring CBK - the bank is benefitting from the continuation of the ECB’s 4% policy rate, the interest rate hedge portfolio rolling off and deposit pricing pressure which isn’t as bad as it expected. Higher for longer on interest rates is exactly why Erik@YWR originally turned bullish on the Euro banks (he anticipated they would just give the extra profits back to shareholders, which is what is happening with the dividends / buybacks). He believes the next stage is for the banks to realise the sky isn’t falling and flip from deleveraging mode to growth mode. Erik’s EPS forecasts for 2024 and 2025 are 20%+ ahead of consensus and sees the share price hitting €27 by 2026 (70% upside).
Edition: 187
- 31 May, 2024