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Investing.com - BofA Securities upgraded Bancolombia S.A. (NYSE:CIB), a $11.9 billion market cap bank trading at a P/E of 8.27, from Underperform to Neutral and raised its price target to $49.00 from $41.00 following the bank’s second-quarter earnings results. According to InvestingPro, the stock is currently trading near its Fair Value.
The upgrade comes after Bancolombia reported quarterly earnings that exceeded expectations, beating BofA and consensus estimates by 7% to 13%, according to the research firm. The bank’s strong performance has contributed to an impressive 71.24% return over the past year.
BofA Securities noted that since the arrival of Bancolombia’s new CFO in September 2024, the bank has demonstrated consistently improved asset quality trends, while its net interest margin has faced lower-than-expected pressure from loan repricing and experienced a softer-than-anticipated decline in rates.
The research firm cited Bancolombia’s attractive valuation, trading below book value, along with its dividend yield of 10% expected in 2026 and a $300 million share buyback program representing approximately 2.5% of market capitalization as factors supporting the Neutral rating.
Despite the upgrade, BofA Securities cautioned that Bancolombia’s earnings growth is expected to be soft next year in a lower interest rate environment, while Colombia’s country risk remains high due to challenging fiscal conditions.
In other recent news, Bancolombia S.A. has announced plans to voluntarily delist its 4.875% Subordinated Notes due 2027 and 8.625% Subordinated Notes due 2034 from the New York Stock Exchange. The company intends to move these notes to the Singapore Exchange (OTC:SPXCY). According to a press release, Bancolombia plans to file a Form 25 with the U.S. Securities and Exchange Commission around August 1, 2025. The delisting is expected to take effect approximately 10 days after this filing. The last trading day for these notes on the NYSE is anticipated to be around August 11, 2025. This strategic move marks a significant change in Bancolombia’s financial operations. The company has not disclosed specific reasons for this transition. Investors may need to adjust their portfolios accordingly due to this shift in trading venues.
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