ZKB downgrades EFG International, deems stock 'fairly valued'

EFG International AG

10/10/2024 10:32

** Shares in Swiss bank EFG International  EFGN.S  slide
1.2%, paring most of Wednesday's gains, after Zuercher Kantonal
Bank (ZKB) downgrades the stock to "market perform" from
"outperform"
    ** The broker views the stock as "fairly valued" after its
good share performance in recent years
    ** EFG shares have risen 9% so far this year, and the stock
is on track for its fourth consecutive year of gains with the
shares doubling in value from the end of 2020
    ** "EFG is well positioned to benefit from the structural
growth profile of the private banking market," ZKB says
    ** Coupled with the continued hiring of new client
relationship managers and operating leverage, this should drive
an EPS CAGR of 3% for 2023-2026, it says
    ** It notes EFG's capital surplus of CHF 0.5 bln ($581.5
mln) can either be used for external growth or distributed to
shareholders as a special dividend
    ** Given the recent increase in M&A in Swiss private
banking, the broker sees the possibility of further deals, with
EFG being a serious candidate to act as a consolidator
    ** In May, sources said Julius Baer  BAER.S  had held talks
with EFG about a potential takeover, adding however that the
discussions had stopped

($1 = 0.8599 Swiss francs)

 (Reporting by Linda Pasquini)
 ((Linda.pasquini@thomsonreuters.com))