RBC downgrades Commerzbank to sector perform on UniCredit execution risk

Investing.com··DEIT·Read original
3▲0 ▼2Impact / 5
Summary · why it matters

RBC Capital Markets downgraded Commerzbank to "sector perform" from "outperform" on Friday, citing rising execution risk from UniCredit's plans for the German lender. RBC cut its price target to €40 from €43 and raised its cost-of-equity assumption to 12% from 11%, noting Commerzbank shares closed at €39.37 on Thursday. UniCredit has secured 49.65% of Commerzbank's voting rights and plans to take control from Jan. 1, 2027, subject to expected European Central Bank approval by year-end. RBC's base case assumes Commerzbank remains standalone under an initial "Unlocked" phase, with restructuring costs of €2.2 billion, cost savings of €1.4 billion and €650 million of lost revenue, alongside plans to release €4 billion of capital. In a later phase RBC calls "New Chapter", Commerzbank could acquire UniCredit's German subsidiary HVB for 25 billion, a deal RBC estimates would generate an 11% return on investment by 2030, rising to 13% if UniCredit delivers its full synergy target. Commerzbank is scheduled to report third-quarter results on Nov. 5.

Impact on assets 5

Financials▼ · 4 stocks
Commerzbank AG
CBK
▼ NegativeCapitalrelevance

RBC downgraded Commerzbank to sector perform and cut its price target to €40 from €43 on UniCredit execution risk

Royal Bank of Canada
RY
▼ NegativeCapitalrelevance

RBC downgraded Commerzbank to sector perform and cut its price target to €40 from €43 on UniCredit execution risk

UniCredit SpA
CRIN
± MixedCapitalrelevance

UniCredit's takeover plans and HVB synergy targets are the cited execution risk, but no direct rating or valuation change for UniCredit is given

Artificial Intelligence▲ · 1 stocks
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