Bbva down in Madrid, weighed down by Ubs analysts' downgrade

(Il Sole 24 Ore Radiocor) - Bbva penalised on the Madrid Stock Exchange by the declassification by analysts of Ubs. Banco Bilbao Vizcaya Argentaria's share price is down and ends up in the bottom platoon of the Ibex 35 index. On the basis of the last 12 months the share price is up about 66%.

Ubs lowered its recommendation on Bbva from 'Buy' to 'Neutral' and reduced its price target to EUR 20.50 from EUR 22.30. "The attractive Rote and Eps profile remains unchanged, but the results catalysts (Turkey) are more difficult to achieve after the conflict in the Middle East," Ubs points out in the summary of the research note. In essence, the analysts note that the Spanish bank remains well positioned in terms of earnings growth, return on tangible equity and distribution, but see limited scope for positive earnings per share and valuation revisions.

Ubs notes that the ambitious four-year guidance provided last year has reduced the room for upside, as seen over the past two quarters. According to Ubs, the slowdown of the disinflationary trend in Turkey weakens the most immediate catalyst for reversing this trend. Moreover, thestock is now trading around industry-average levels, compared to its historical discount. This,' Ubs added, 'reflects an improvement in yields, but also a higher cost of equity, both results of Bbva's appetite for emerging markets.