Bank of America just raised its EUR/USD forecast
On Tuesday, CFRA analysts adjusted the price target for Bank of Ireland Group (BIRG:ID) (OTC: BKRIY) to EUR9.00, an increase from the previous EUR7.50, while maintaining a Sell rating on the stock. The new target is based on a price-to-book (P/B) ratio of 0.72 times the consensus 2025 book value per share (BVPS) of EUR12.58.
The firm also revised its earnings per share (EPS) forecast for 2025 to EUR1.40, down from EUR1.50, and introduced an EPS estimate of EUR1.50 for 2026. This adjustment comes in the wake of Bank of Ireland’s reported pre-tax profit of EUR1.85 billion for the year 2024, which fell short of the consensus estimate of EUR1.95 billion.
Bank of Ireland experienced a 3% decline in net interest income, totaling EUR3.56 billion, as loan growth was eclipsed by a reduction in the net interest margin. Conversely, non-interest income saw a 3% increase to EUR730 million, bolstered by strong results in wealth management and the retail business.
The bank’s higher operating expenses have led to a 4 percentage point increase in its cost/income ratio, now at 46%. As a result, the return on tangible equity (RoTE) for Bank of Ireland has decreased to 16.8%, down from 17.3%.
Looking ahead to 2025, CFRA anticipates a challenging environment for Bank of Ireland. The analysts forecast that loan and wealth asset growth will slow down, and with lower interest rates coupled with rising operating expenses due to investments and inflation, they express skepticism regarding any significant improvement in the bank’s RoTE for the year.
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