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Deutsche Bank (ETR:DBKGn) raised its price target on Erste Group Bank (EBS:AV) (OTC:EBKDY) to EUR84.00 from EUR72.00 on Thursday, while maintaining a Buy rating on the stock. The bank’s shares have shown remarkable strength, delivering a 74.58% return over the past year and currently trading near its 52-week high of $42.40. According to InvestingPro, the company maintains a GOOD financial health score with particularly strong price momentum.
The price target increase reflects Deutsche Bank’s positive view of Erste’s acquisition of a 49% stake in Santander (BME:SAN) Bank Polska, which is expected to provide approximately 20% earnings per share accretion and a 4% return on tangible equity uplift.
Deutsche Bank considers the Polish acquisition "strategically sound," noting that it complements Erste’s existing Central and Eastern European operations while offering additional growth potential.
The investment bank continues to view Erste Group as an attractive investment on a standalone basis, with the Polish profitability boost further enhancing its appeal to investors.
Erste Group Bank remains one of Deutsche Bank’s top picks among European banks, with the stock currently trading at 7.5 times projected earnings for 2026.
In other recent news, Erste Group Bank has received an upgrade from UBS, with analyst Mate Nemes raising the stock rating from Neutral to Buy and increasing the price target to EUR80. This change is largely attributed to Erste’s recent acquisition of Santander Polska, which is expected to positively impact the bank’s sustainable return on tangible equity. The acquisition is forecasted to enhance earnings per share accretion into the low-teens by 2026, with a high-single-digit increase thereafter. Previously, Austria accounted for a significant portion of the group’s loans, but the integration of Santander Polska is anticipated to provide a new growth avenue with attractive margins. This move is seen as a strategic effort to improve growth momentum and capital allocation for Erste Group. The acquisition also offers Erste broader access to intra-regional trade flows in Poland and the potential to expand its digital banking platform, ’George’, into the Polish market. The UBS analyst highlights the acquisition as a transformative step, enhancing Erste Group Bank’s growth trajectory and capital efficiency.
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