Deutsche Bank Upgrades ING Group (ING) to Buy; Valuation Call

November 2, 2009 8:10 AM EST

Deutsche Bank upgrades ING Group (NYSE: ING) from Hold to Buy.

Deutsche analyst says, "Our Hold rating so far this year has reflected our concern that the market had not fully appreciated capital risks at ING, particularly as regards double leverage. But in the context of the share price fall this week, and greater fundamental clarity now that capital and restructuring needs are clearly defined, we find ourselves feeling much more positive, and better able to focus on the earnings story. Despite a lower price target reflecting more the onerous capital needs than expected, we see 24% upside from here, and upgrade the stock from Hold to Buy.

"We have cut our sum of the parts based target price from €12.5 to €11.0, reflecting the less favourable outcome on restructuring than we had previously allowed for. However, this leaves 24% upside from current levels. Key downside risks are failure to achieve necessary proceeds from the insurance disposals, potential operational underperformance of the insurance operations in the period they are up for sale, credit losses being more adverse than forecast, inability to deliver on cost cutting initiatives, and regulatory and political risks."

To see more analyst ratings on ING Click Here.

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