Barclays on Chilean Banks: Fine-tuning EPS, Introducing 2012 PTs
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Price: $13.87 +0.58%
Rating Summary:
6 Buy, 3 Hold, 3 Sell
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Today's Overall Ratings:
Up: 14 | Down: 11 | New: 17
Rating Summary:
6 Buy, 3 Hold, 3 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 14 | Down: 11 | New: 17
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Barclays on Chilean Banks: Fine-tuning EPS, Introducing 2012 PTs
Barclays analyst, Roberto Attuch, said, "We are fine-tuning our estimates for Chilean banks mostly to incorporate 3Q results trends and macro assumptions. As a result of the changes, our local currency earnings estimates for SAN and BCH are some 5-10% lower than previous. Our new EPADR estimates also reflect a devalued CLP assumption. Our new price targets (PTs), derived from both DCF and residual income methodologies previously used, essentially reflect these changes and are now discounted for year-end 2012 versus 2011YE previously."
"Banco Santander-Chile's (NYSE: SAN) short-term underperformance vs. Banco de Chile (NYSE: BCH) should be transitory. SAN is down 21% in the last 30 days, vs. BCH -7% and the MSCI Latam index -11%. In our view, the decision of Santander Spain to launch last week a secondary equity offering of a c.8% stake of its Chilean sub's shares through a disposal of ADRs (SAN) has mostly been behind the underperformance, and we would anticipate overhang pressure on SAN to likely persist until the conclusion of the offer. Nevertheless, it doesn't change our longer-term view on SAN; we remain Equalweight."
Barclays maintains an Underweight on BCH, raises PT $1 to $76, but lowers FY11 EPS estimate from $6.70 to $6.24 and FY12 from $6.95 to $6.15.
Barclays lowers SAN's PT from $80 to $78, slashes FY11 EPS estimate from $5.78 to $5.08 and FY12 from $6.60 to $5.49.
Barclays analyst, Roberto Attuch, said, "We are fine-tuning our estimates for Chilean banks mostly to incorporate 3Q results trends and macro assumptions. As a result of the changes, our local currency earnings estimates for SAN and BCH are some 5-10% lower than previous. Our new EPADR estimates also reflect a devalued CLP assumption. Our new price targets (PTs), derived from both DCF and residual income methodologies previously used, essentially reflect these changes and are now discounted for year-end 2012 versus 2011YE previously."
"Banco Santander-Chile's (NYSE: SAN) short-term underperformance vs. Banco de Chile (NYSE: BCH) should be transitory. SAN is down 21% in the last 30 days, vs. BCH -7% and the MSCI Latam index -11%. In our view, the decision of Santander Spain to launch last week a secondary equity offering of a c.8% stake of its Chilean sub's shares through a disposal of ADRs (SAN) has mostly been behind the underperformance, and we would anticipate overhang pressure on SAN to likely persist until the conclusion of the offer. Nevertheless, it doesn't change our longer-term view on SAN; we remain Equalweight."
Barclays maintains an Underweight on BCH, raises PT $1 to $76, but lowers FY11 EPS estimate from $6.70 to $6.24 and FY12 from $6.95 to $6.15.
Barclays lowers SAN's PT from $80 to $78, slashes FY11 EPS estimate from $5.78 to $5.08 and FY12 from $6.60 to $5.49.
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