(CercleFinance.com) – The stock is up sharply today (+ 4.30%) after the agreement with BMO Financial Group for the sale of 100% of its commercial banking activities in the United States operated by its subsidiary Bank of the West, for a total price consideration of $ 16.3 billion in cash.
The transaction should be formally completed in 2022 and should generate an exceptional capital gain (net of tax) estimated at around 2.9 billion euros upon completion.
Oddo BHF reaffirms its ‘outperformance’ opinion on BNP Paribas with a price target raised from 67 to 71 euros, to include a release of excess capital of seven billion euros.
The design office stresses that the sale price of $ 16.3 billion is higher than expected, but that the share buyback program that will be launched following this sale only aims to neutralize the dilution.
If the net financial impact of the operation therefore remains according to him ‘at this stage difficult to quantify’, Oddo still considers that the BNP Paribas share ‘offers an attractive appreciation potential for a limited risk profile within the sector’ .
Jefferies also reaffirms its ‘buy’ recommendation and its target price of 72 euros on BNP Paribas.
“We consider this news positively because it will unlock significant hidden value and allow a reallocation of capital within the group (which, in our opinion, will lead to a revaluation of the shares)”, indicates the broker.
According to Jefferies, this transaction, which should be finalized in the course of 2022, will also generate for the French banking establishment ‘an attractive return on capital as well as growth opportunities’.
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