Analyst Recommendations On State Bank Of India

Analyst Recommendations On State Bank Of India

  • Maintains ‘buy’ rating; raises price target to Rs 560 apiece from Rs 385.
  • Strong NII provision; large buffer built for employee provisioning.
  • Asset quality is delivering better outcomes versus even private banks.
  • Revises earnings estimates higher by 15-26% and expects RoEs of 14% by FY23.
  • Expects material re-rating beyond 1x book.
  • Still remains a deep value opportunity and current re-rating should continue.

Macquarie

  • Maintains ‘outperform’ rating; hikes price target to Rs 450 apiece from Rs 360.
  • Increased confidence in balance sheet, strong asset quality.
  • Pare credit cost assumptions for FY21, FY22 and FY23 by 40, 30 and 30 basis points, respectively, to 240 basis points, 120 basis points and 120 basis points.
  • Can sustain RoA of 1%.
  • Raises EPS estimates by 77%, 13% and 14% for FY21, FY22 and FY23, respectively.
  • Remains top pick among PSUs.

JM Financial

  • Maintains ‘buy’ rating; raises price target to Rs 480 apiece from Rs 350.
  • Strong results with improvement across all key parameters.
  • Expects SBI to report lower slippages / restructuring for FY21, followed by sharp declines in FY22/FY23.
  • Liability franchise remains unparalled with deposit growth of 14% and robust CASA ratio.
  • Asset quality perceptions kept valuations suppressed despite core fundamentals consistently outperforming.
  • Expects RoA/RoE of 0.8% and 15%, respectively, by FY23 as credit costs normalise.
  • Expects multiples to re-rate higher as RoAs expand.
  • Remains top pick.

Emkay

  • Maintains ‘buy’ rating; hikes price target to Rs 460 apiece from Rs 340.
  • Once again surprised positively on asset quality.
  • Retail credit growth gaining pace which should lead to structurally stronger NIMs.
  • Will be one of the biggest beneficiaries of the pick-up in lumpy corporate resolutions stalled for long.
  • Revises earnings estimates higher for FY21-23 by 30-60% and expects RoAs and RoEs of 0.8% and 14%, respectively, in FY23.
  • Limited stress from Covid, corporate resolutions to drive-down credit costs.
  • Likes strong liability profile, higher retail orientation and sharply improving return ratios.

Motilal Oswal

  • Maintains ‘buy’ rating; raises price target to Rs 475 apiece from Rs 330.
  • Robust operating performance in a challenging environment.
  • Asset quality outlook encouraging.
  • Slippages plus restructuring to remain within the guided range.
  • Strong operating performance, controlled slippages and higher coverage provides comfort.
  • Well on track to keep credit costs under control.
  • Recoveries from resolution of large accounts can further support earnings.
  • Projects RoA, RoE of 0.8% and 14.5% by FY23.
Analyst Recommendations On State Bank Of India via @goldsilverrepor
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