Raiffeisen Bank stock rating downgraded by Barclays on geopolitical risks

Investing.com - Barclays downgraded Raiffeisen Bank International AG (VIE:RBI) (OTC:RAIFY) stock rating from Overweight to Equalweight while maintaining a price target of EUR29.00.

The downgrade follows an approximately 85% total return for Raiffeisen Bank since the end of October 2024, significantly outperforming European banking indices SX7P and SX7E, which gained 59% and 68% respectively during the same period.

Barclays attributes the rally primarily to geopolitical optimism following President Trump’s election and speculation around a potential peace deal between Russia and Ukraine, noting that RBI shares jumped 17% after the announcement of a Trump-Putin meeting compared to just 5% for sector indices.

The bank’s research team has adopted a more cautious stance due to recent escalations in EU and US sanctions against Russia, suggesting that progress toward a peace deal remains limited and the path forward is likely to be prolonged and uncertain.

Barclays suspects the current valuation may already reflect a best-case scenario, leaving limited room for upside should geopolitical risks persist or intensify given the bank’s exposure to Russia and macroeconomic risk.

In other recent news, Raiffeisen Bank International AG has been upgraded by UBS from a Neutral to a Buy rating. This upgrade is attributed to the bank’s consistently strong core operating results over the past year, excluding its Russian operations. UBS highlighted that Raiffeisen’s net interest income exceeded expectations, and there was an improvement in fee generation. Additionally, trading and other income reached higher levels, contributing to the positive assessment. The investment firm also significantly raised its price target for Raiffeisen to EUR31.00 from EUR20.60. These developments reflect the bank’s robust performance in its core operations. UBS’s analysis suggests confidence in Raiffeisen’s financial health and growth potential.

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