Bank of America just raised its EUR/USD forecast
On Wednesday, Swedbank shares faced a downgrade by BofA Securities, with the firm’s analyst Tarik El Mejjad adjusting the rating from Neutral to Underperform and setting a new price target of SEK 217.00, down from SEK 239.00. The revision comes as a result of the stock’s recent outperformance compared to its Nordic peers over the past six months, attributed to factors that El Mejjad believes are temporary.
The analyst pointed out that Swedbank’s net interest income (NII) showed resilience due to temporary effects, such as higher dividend payouts and lower market expectations for policy rate cuts. However, El Mejjad anticipates a significant decline in the bank’s 2025 estimated NII. He also predicts that the operating jaws – the difference between the growth rates of revenue and expenses – will be widely negative.
Furthermore, El Mejjad mentioned that the potential positives from a US fine settlement have already been factored into the stock’s distribution. When considering Swedbank’s price-to-earnings (P/E) ratio of 10.5x for 2026 estimates and a price-to-tangible book value (P/TBV) of 1.4x, against the backdrop of a 13.5% return on tangible equity (ROTE) and an approximately 8% yield, the analyst concluded that the stock appears expensive.
The downgrade reflects a cautious stance on Swedbank’s future financial performance, with the lowered price target representing a 9% decrease from the previous target of SEK 239. The analyst’s comments suggest that the current share price has fully integrated the bank’s recent positive developments, leaving little room for upward movement under the current conditions.
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