On Wednesday, Credit Agricole (EPA:CAGR) SA (ACA:FP) (OTC: OTC:CRARY) saw its stock rating improve as Jefferies shifted its stance from "Hold" to "Buy." Accompanying the upgrade, the firm also raised its price target for Credit Agricole to €21.60, ascending from the previous target of €13.40.
The upgrade is grounded in the bank's robust return on tangible equity (ROTE), which averages 14%, and the anticipation of significant tangible book value (TBV) per share growth and dividend payouts. These factors are expected to contribute over 50% of the current market cap.
Additionally, Jefferies forecasts positive earnings revisions for Credit Agricole, projecting their estimates to be, on average, 13% higher than the consensus, with specific outperformance in asset gathering, consumer finance, and capital markets revenue.
Jefferies has set a price target that leads the market, valuing Credit Agricole shares at 1.1 times TBV. This new target of €21.60 marks a significant increase and reflects a bullish outlook on the bank's financial performance and stock valuation.
Credit Agricole has not publicly responded to the upgrade and new price target at the time of reporting. The market is anticipated to watch closely how this financial institution's shares perform in the wake of Jefferies' optimistic appraisal. Stocks will continue to be traded on their respective exchanges, ACA:FP in Paris and CRARY over-the-counter, as investors digest the implications of this upgraded rating and price target.
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