Deutsche Bank Upgrades Bancolombia S.A. (CIB) to Buy; Increasing Estimates and PT after 4Q10

March 9, 2011 10:32 AM EST
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Price: $37.97 +1.15%

Rating Summary:
    3 Buy, 4 Hold, 2 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 30 | Down: 30 | New: 23
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Deutsche Bank upgraded Bancolombia S.A. (NYSE: CIB) to Buy. PT increased from $66 to $72.

Deutsche analyst says, "We are upgrading Bancolombia to Buy following better than expected 4Q10 results. Earnings should benefit from a higher NIM as rates rise, decent loan growth, and stable asset quality. We increase our forecasts to reflect 4Q10 results and expect core earnings growth of 15% in 2011, following a 21% increase in 2010. Furthermore, valuations have come down from peak levels and the bank trades at 2.8x trailing P/BV, basically in-line with its five-year average."

"We are increasing our earnings estimates by 9% in 2011 to COP1,628bn and by 4% in 2012 to COP1,873bn, mainly due to lower provision charges. We now expect core earnings growth of 15% in 2011 and 2012, following a 21% increase in 2010. Meanwhile, we expect ROAE to remain stable at 19% both years."

For more ratings news on Bancolombia S.A. click here and for the rating history of Bancolombia S.A. click here.

Shares of Bancolombia S.A. closed at $58.53 yesterday.

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