Bank of Ireland’s new shares edge higher on first day of trading
Davy increases price target for bank’s new shares to €8.40
Analysts at stockbrokers Davy raised their price target for the new Bank of Ireland shares to €8.40 from €8.10 Photograph: Nick Bradshaw
Bank of Ireland’s new shares gained 0.3 per cent to €7.40 on their first day of trading in Dublin, following a reorganisation of the group that saw investors receive one share for every 30 they previously held.
The shares are in a new holding company at the top of the group’s corporate structure.
Analysts at stockbrokers Davy in Dublin raised their price target for the new shares to €8.40 from €8.10, saying the company’s forthcoming first-half results, due on July 28th, should help “correct” the stock’s recent underperformance against the wider European banking sector.
“In particular, we expect a stabilisation in the defined-benefit pension deficit to extend the recent rally,” said the Davy analysts, including Stephen Lyons, Diarmaid Sheridan and Emer Lang, adding that they estimated that the pension scheme’s deficit stood at about €650 million at the end of June.
Separately, Fitch assigned a long-term BBB- rating to the new Bank of Ireland holding, with a positive outlook, “based on the bank’s strong domestic franchise, strengthened capitalisation, normalised funding profile, sound liquidity, diversified revenue streams and improving, albeit still weak, asset quality”.