Source: Investing Published Tuesday 27/08/2024, 14:55
Bendigo & Adelaide Bank Ltd (BEN: AU) (NYSE: BXRBF) saw a change in the stock’s rating as Morgan Stanley downgraded the financial institution’s rating from overweight to relative equal weight. This adjustment was accompanied by a slight reduction in the price target, which is now set at AUD 11.90, down from the previous target of AUD 12.20.
The reduction follows the bank’s results for the second half of fiscal 2024 and its comments on its outlook, which indicated an increase in investment spending and cost growth. Although the bank has shown positive momentum for the franchise and has a strategy to improve returns, these factors are expected to negatively impact the agreed earnings estimates.
In addition, the bank’s profit margins were described as “stable”, which may not support further growth in the share price in the short term. Morgan Stanley noted that Bendigo & Adelaide’s P/E multiplier has increased from about 11x to about 14x over the past twelve months. This revaluation suggests a more expensive valuation of the bank’s shares, which may limit the likelihood of outperforming soon.
Analysts’ comments reflect a cautious stance on the bank’s near-term outlook, taking into account the financial institution’s recent financial performance and market assessment. Investors are likely to notice this updated view by Morgan Stanley as they assess their positions in Bendigo Bank and Adelaide shares.
The new target price of A $11.90 represents Morgan Stanley’s current valuation of the Bank’s share, adjusted in light of recent developments and challenges identified in the Bank’s financial outlook. Bendigo & Adelaide Bank shareholders and potential investors will be watching closely to see how these factors will affect the Bank’s future stock performance.
Following the recent downgrade by Morgan Stanley, investors at Bendigo & Adelaide Bank Ltd (BEN: AU) (OTC: BXRBF) may seek deeper insights into the bank’s financial health and market position. According to Investing Pro data, Bendigo & Adelaide Bank has a market capitalization of Currently around $10.85 billion, with a price-to-earnings ratio of 12.9. Interestingly, looking at the past twelve months as of the third quarter of 2024, the adjusted price-to-earnings ratio seems to be more favorable at 9.91, suggesting a lower valuation relative to the bank’s earnings.
