Market Overview

Banco Santander Brasil Upgraded, Price Target Raised 39% By Credit Suisse

Share:
Banco Santander Brasil Upgraded, Price Target Raised 39% By Credit Suisse

Credit Suisse upgraded Banco Santander Brasil SA (ADR) (NYSE: BSBR) to Neutral from Underperform on better-than-expected execution, resilient asset quality, strong cost control and repricing strategy.

However, valuation prevents the brokerage to take more constructive stance on the stock on which it raised the target price to R$25 from R$18.

Credit Suisse also raised its net profit estimates for 2016 and 2017 by 8.4 percent and 14.2 percent, respectively, mainly due to stronger fee revenues and lower effective tax rate.

“In our view, solid management execution should likely lead the bank to sustain the inspiring performance of its fee generating businesses and to keep core opex under control,” analyst Marcelo Telles wrote in a note.

Related Link: This Week's Dow Earnings: Big Expectations For Goldman Sachs, Intel, UnitedHealth

Further, Telles expects more volume and NII growth than peers in 2017 (+3.0 percent in 2017 and +6.6 percent in 2018), driven by slightly higher risk appetite.

“Accordingly, NII should also increase at a more solid clip, fueled not only by loan growth, but also by lower interest rates, increasing credit spreads, and better credit mix (higher yield segment are gaining relevance),” Telles continued.

In addition, the analyst pointed out that the company’s resilient asset quality suggests that Santander is still bearing fruits from its de-risking efforts.

“We now anticipate R$10.8 billion in net provisions in 2016 (+4.3 percent y/y) and R$8.6 billion in 2017 (-14.9 percent y/y). We also believe the bank is less exposed to the risks of the large corporate sector in Brazil,” Telles added.

ADRs of Banco Santander closed Friday’s trading at $7.36.

Full ratings data available on Benzinga Pro.

Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email feedback@benzinga.com with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!

Latest Ratings for BSBR

DateFirmActionFromTo
Mar 2020JP MorganMaintainsNeutral
Nov 2019UBSUpgradesSellNeutral
Aug 2019CitiUpgradesNeutralBuy

View More Analyst Ratings for BSBR
View the Latest Analyst Ratings

 

Related Articles (BSBR)

View Comments and Join the Discussion!

Posted-In: Credit SuisseAnalyst Color Emerging Markets Upgrades Price Target Forex Markets Analyst Ratings Best of Benzinga

Latest Ratings

StockFirmActionPT
CAMTStifelInitiates Coverage On19.0
ELMDNorthland Capital MarketsInitiates Coverage On15.0
DKNGUBSInitiates Coverage On52.0
DIODTruist SecuritiesInitiates Coverage On84.0
TGTArgus ResearchUpgrades205.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com