On the XETRA trading platform, the pbb share temporarily fell by 5.89 percent to EUR 6.88.
Citigroup analyst Borja Ramirez Segura downgraded the real estate financier’s shares from “neutral” to “sell” and lowered the target price from 8.60 to 6.10 euros.
According to the US bank Citigroup, the Deutsche Pfandbriefbank could not avoid higher provisions. The market for commercial real estate is in a downturn, investor demand is falling and prices are falling, analyst Borja Ramirez Segura wrote, according to a study available on Tuesday.
As a result, he is now more cautious than the average analyst when it comes to the real estate financier’s provisions for loan defaults.
In his base scenario, Ramirez Segura expects prices for commercial real estate to fall by an average of 20 to 30 percent in the current year and next. In a vulnerability analysis he prepared, this would mean additional provisions for loan defaults of around 100 million euros, which he says should be divided equally between 2023 and 2024.
He therefore lowered his estimates for the specialist bank’s earnings per share. His forecasts are now ten percent below the market estimate. With a view to the hard core capital ratio, which was 16.6 percent at the end of the first quarter, the bank is in a “solid position” despite everything.
With the “Sell” rating, Citigroup predicts a negative total return for the stock for the next twelve months.
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FRANKFURT (dpa-AFX Broker)
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