Berenberg raises AIB Group stock target, maintains buy on robust performance

On Monday, Berenberg increased the stock price target for AIB Group (OTC:) PLC (AIBG:ID) (OTC: AIBRF) to EUR6.30, up from EUR6.00. The firm kept a Buy rating on the stock. This adjustment follows AIB’s first-half 2024 earnings report on August 2, which the firm believes showcased the bank’s robust performance.

The bank’s recent earnings report indicated an upward revision in net interest income guidance, bolstered by vigorous loan growth and persistent deposit costs. AIB’s ability to sustain profitability has been marked by high capital distributions, with yearly total yields averaging around 14%. According to Berenberg, the strengths of AIB are currently undervalued by the market, as the bank’s shares are trading at par with the sector, significantly below their historical average premium of 25%.

Berenberg’s stance is that the current share price represents an attractive opportunity to invest in a bank that stands out within its sector. The firm’s new price target suggests there is a 25% upside potential for AIB Group’s shares. The endorsement of AIB as one of the top picks in the banking sector is based on the bank’s solid financial results and promising outlook for profitability.

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