European bank price targets moved broadly higher in Morgan Stanley’s latest sector review, with the firm raising its objectives for lenders across the euro area, Switzerland, Ireland and the United Kingdom.
Morgan Stanley increased its target for ING Groep (NYSE: ING) to €37 from €33 and lifted Deutsche Bank (NYSE: DB) to €38.50 from €37. The firm also raised its UBS Group (NYSE: UBS) target to CHF41 from CHF40 and set a €14.70 objective for Banco Santander (NYSE: SAN).
Several larger revisions appeared elsewhere in the review. Morgan Stanley raised Bawag to €222 from €192, Erste Group Bank to €137 from €123, BNP Paribas to €129 from €120 and Commerzbank to €44 from €39.50. Targets for CaixaBank, Credit Agricole, Lloyds Banking Group, KBC Group and Bank of Ireland were also increased.
European Bank Price Targets Reflect a Broad Sector Reassessment
The changes represent Morgan Stanley’s analyst estimates rather than company guidance or guaranteed share-price outcomes. Price targets generally reflect assumptions about earnings, valuation multiples, capital returns and economic conditions, and those assumptions can change as new information becomes available.
The breadth of the revisions is notable because the adjustments were not confined to a single country or business model. The list included universal banks, domestic retail lenders and institutions with substantial wealth-management or corporate-banking operations.
Investors will still need to assess the targets alongside interest-rate expectations, credit quality, deposit competition and regulatory capital requirements. The stated euro and Swiss franc targets refer to the banks’ relevant European listings and should not be interpreted as direct targets for U.S.-traded depositary receipts.
