UPDATE: J.P. Morgan Initiates Coverage on Santander Mexico with Neutral Rating, $16 PT

In a report published Monday, J.P. Morgan & Co. initiated coverage on Santander Mexico BSMX with a Neutral rating and $16.00 price target. J.P. Morgan noted, “We are initiating coverage with a Neutral rating and a Dec 2013 PT of Ps.37/share and US$16/ADR. As a leading financial institution, Santander Mexico is well positioned to benefit from the positive structural growth story of Mexican banks. However, we think cyclical trends and company-specific factors point to only modest earnings growth in the coming years. After rising 19% since its IPO, the valuation at 2.5x 12E bv and 13.0x 13E earnings does not look sufficiently compelling to recommend the shares. Credicorp and Bradesco remain our large cap Overweight-rated bank stocks.” Santander Mexico closed on Friday at $14.43.