BofA Holds Up on Security Bank Stock, Sees Profit Increase and Strong Loan Growth Ahead By Investing.com
On Monday, BofA Securities made a significant change to its stance on Security Bank Corp (SECB:PM) (OTC:SYBJF), raising the bank's stock rating from Neutral to Buy. Accompanying this improvement is a significant increase in price target, which now stands at PHP136.00, up from the previous target of PHP77.00.
The firm's analyst pointed to a strong growth outlook as the main reason for the upgrade. The revised price objective is based on the Gordon growth model and reflects a forward price-to-book (P/B) ratio of 0.65 times for the 2025 financial year. This target is set at one standard deviation above the bank's five-year P/B ratio, taking into account the bank's projected high return on equity (ROE).
The development comes with an optimistic outlook on the bank's financial performance. BofA Securities raised its earnings estimates for Security Bank for fiscal years 2025 and 2026 by an average of 13%. The company expects the bank's profits to grow by 23% in fiscal year 2024 and by an even greater rate of 38% in fiscal year 2025. These estimates are based on expectations of strong credit growth and net interest margin (NIM) for the next rate hike. cuts.
The firm's outlook for Security Bank remains more positive than consensus, suggesting that other analysts and investors may soon follow suit with upward revisions. Analyst expectations for fiscal years 2025 and 2026 are higher than the current market consensus, reflecting the belief that the market has not fully realized the bank's growth potential.
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