Deutsche Bank Upgrades Royal Bank of Scotland (RBS); Raises PT
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Deutsche Bank upgrades Royal Bank of Scotland (NYSE: RBS), increase PT to 50p from 45p.
Deutsche analyst says, "RBS' 3Q09 results were a little better than we forecast driven by lower impairments in particular. We expect the bank to lose money next year, driving TNAV to 49p and core tier 1 below 10%. Thereafter however we see good prospects for the bank to deliver decent profits, placing the stock on 6x 2012 EPS of 7p (stated), and with prospects around capital returns (2012 core tier 1 = 12%)...On our estimates RBS is trading at 0.7x trough tangible book, 6x 2012 stated EPS and 5x 2012 core bank EPS, and with a reasonable prospect of surplus capital. Though the burden of proof around earnings and capital remains with management, we believe the tide is shifting towards a more positive stance from RBS on this front, with better capital run-off and cost cutting targets possible with results in February 2010. Downside risks relate to weaker than expected capital market revenues and asset prices, and higher-for-longer loan losses. RBS is also exposed to regulatory risk, given the cost of transferring ABN AMRO to Basel 1, market risk-weighted asset changes and the disadvantages in the investment bank of curbs on pay practice."
To see more analyst ratings on RBS Click Here.
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us investor on Nov 10, 2009 02:24 PMInteresting how RBS shares climbed up yesterday, but the credit rating upgrace came out today. Just wondering if someone at Deutsche Bank is leaking insider info before the market get it's info.