JPMorgan Upgrades ABN Amro Stock Amid M&A Expectations
On Thursday, JPMorgan upgraded ABN Amro stock from Underweight to Neutral, setting a price target of EUR 15.30. The shift comes as the European banking sector anticipates increased mergers and acquisitions (M&A) activity.
Analysts highlight ABN Amro's attractive valuation at 0.5 times price to tangible net asset value (P/TNAV) and a PE ratio of 5.8 for 2026, with a RoTE of 8.7%. Potential buyers find the Dutch retail operations and Northern European Private Banking business appealing.
However, the Dutch government's 41% ownership stake in ABN Amro could impact acquisition prospects. JPMorgan forecasts limited NII growth from 2024 to 2026, with modest loan growth compared to competitors.
Looking ahead, ABN Amro's RoTE is expected to reach 9% by 2026, with a high CIR of 63% and provisions estimated at 20 basis points annually for 2025 and 2026.
Overall, ABN Amro presents an intriguing investment opportunity amidst M&A expectations and favorable valuation metrics. Potential buyers should consider the bank's strengths and weaknesses before making any investment decisions.