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Investing.com -- Deutsche Bank has resumed coverage of Banco Sabadell (BME:SABE) with a “hold” rating and a price target of €3.30, just below the stock’s last close of €3.35.
Shares of the Spanish financial services company were down about 1% at 04:33 ET (08:33 GMT).
Analyst Alfredo Alonso said the target reflects the view that Sabadell’s shares are trading at a fair price, taking into account stronger guidance on capital distribution and an improved medium-term outlook.
The brokerage noted that since BBVA launched its offer for Sabadell 16 months ago, the Spanish bank’s shares have moved closely in line with BBVA’s. However, it said the roughly 10% discount to BBVA’s offer price was justified.
Alonso added that for BBVA’s bid to succeed, the bank would likely need to raise its offer.
He also pointed to Sabadell’s planned €2.5 billion extraordinary dividend from the sale of TSB, which could make holding the shares more attractive in the near term.