(CercleFinance.com) – Bank of America raised its opinion on Societe Generale stock on Friday, going from ‘underperformance’ to ‘neutral’, with a price target reduced from 31 to 28 euros.
In a research note, the American broker hails the improvement in the risk profile of the French banking group, which it sees benefiting from the rise in interest rates, growing business volumes and rising commissions.
BofA nevertheless highlights a low return on tangible equity (ROTE) ratio of 7%, as well as distributions to shareholders that are in the sector average.
The broker also expresses his concerns about the rise in the group’s costs, deeming it unlikely that there will be good surprises in terms of capital redistribution at a time when the bank is trying to reconstitute a cushion of equity, within the meaning of the ‘CET1’ ratio.
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