9 hours ago
HomeMarket NewsYes Bank shares' lowest price target implies a 25% downside on lack of re-rating triggers
Of the 11 analysts that have analysts that have coverage on Yes Bank, only Nomura has a "hold" rating and the remaining have "sell" ratings.
Shares of Yes Bank Ltd. can decline 25% from Monday's closing levels, according to a note from Goldman Sachs on Tuesday, June 24.
Shares of the Mumbai-based private lender have declined 4% in the last one month.
Goldman Sachs has a "sell" rating on Yes Bank with a price target of ₹15 per share, which is the lowest target on the street for the bank. The stock ended the previous session at ₹19.88 apiece.
Goldman Sachs listed key takeaways from the lender's management meet:
Post the conclusion of Sumitomo Mitsui Banking Corporation's (SMBC) stake purchase of 20% from SBI and the consortium of lenders, the potential synergies may play out especially in mid-sized corporate segment.
The CEO extension was sought only for six months. A new board will take a decision regarding the next CEO, post-induction of the SMBC's nominees.
The bank remains on track to achieve 1% return on assets by the financial year 2027, driven by three factors — net interest margin expansion, operating leverage and non-interest income.
Loan growth will remain in the 13%-15% range but profitable growth is the key focus area.
Goldman Sachs said it estimates Yes Bank to deliver 14% loan growth and a 3 basis points expansion of return on assets over FY25-27.
However, it believes that for any meaningful re-rating to happen, return on equity needs to surpass cost-of-equity for the lender with sustained momentum in loan growth.
Of the 11 analysts that have analysts that have coverage on the stock, only Nomura has a "hold" rating and the remaining have "sell" ratings.
Shares of Yes Bank are trading 1% higher on Tuesday at ₹20.09. The stock trades below the SMBC acquisition price of ₹21.5.
Also Read: Gland Pharma shares gain up to 3% after USFDA closes inspection at Visakhapatnam unit
