Tuesday, March 28

Banco Sabadell points to the euro after 9 days on the rise. 33% potentials

Banco Sabadell’s shares are recorded in the year 38 percent and lead with solvency the upward ranking of the IBEX 35.

After chaining a streak of nine sessions on the rise, Sabadell Bank took a breather on Monday, but continues to aim high. These consolidation movements are normal in such vertical rises and in bearish sessions like the one on February 7th.

The analysts consulted by finanzas.com they believe that there is strength to reach the level of one euro, a psychological zone that still leaves an upward margin of 20 percent.

The results that the entity has just presented justify the advances, as well as its plans to increase the dividend that it advanced finanzas.com and the good moment in the sector after increasing expectations of rate hikes by the ECB.

Consensus moves higher with Banco Sabadell

What is beginning to be seen among market valuations is an upward adjustment, also known as “rerating”, in light of the results and projections presented by the entity.

For example, JB Capital Markets raised the target price to €1.1, implying a 33 percent upside potential. The same has been done in Bestinver Securities, whose experts calculate a price of 0.98 euros and a potential of 18 percent.

Along the same lines, analysts at Renta 4 Banco raised Banco Sabadell’s target price to 1.1 euros per share, while Alantra Equities stayed slightly lower, at 0.89 euros.

Among the latest valuations, only the economists at Exane BNP Paribas were more cautious and calculated a price of 0.58 euros, which implies a bearish margin of almost 30 percent.

Banco Sabadell points to the euro

In a day of falls of 0.7 percent for the IBEX 35, Banco Sabadell’s correction barely stayed at 0.1 percent, a testimonial decline that reflects the market’s confidence in the entity. That the quote takes a breather is something that is in the script.

“There are many days of rise and it is normal that you can make a correction,” said the magazine’s director of analysis INVERSION, Josep Codina.

Banco Sabadell completed on Monday “the objective that we had set at 0.855 euros due to the activation of a second upward impulse”, he told finanzas.com Sergio Ávila, IG analyst.

“When this level is reached, it could take a break on the rise, but the trend is bullish and it is most likely that it will end up completing the V-turn that will take it to the highs of December 2019, slightly above the euro,” he recalled. Avila.

In the very short term, however, Codina pointed out that Banco Sabadell “has a pending gap to close from January 2020, when the crisis began, which is right at 0.9 euros.” This is where the next battle will be before the assault on the one-euro zone.

To the extent that it is capable of chaining two or three weekly candlesticks above 0.77-0.78 euros, where it has the average of 200 sessions, “the chances of going to close the bearish gap that it left at the end of January 2020 in the 0.92 euros increase”, he explained to finanzas.com José Luis Herrera, analyst at Global Investment Bank (BIG).

The key to sustaining progress

All in all, the key would be for Banco Sabadell “not to go below 0.75 euros,” said Codina. This area is practically 10 percent away.

For now, the minimums and maximums are increasing and “the important thing would be that it could close the gap, with the first resistance around 0.85 and that extends to 0.9 euros,” he added. Codina.

Corrections up to 0.80 euros would be more or less normal, even up to 0.78 euros, which could define a continuation pattern to continue advancing, recalled the director of analysis for INVERSION magazine.

For now, Banco Sabadell is complying with the upward roadmap, to which the good tone of the banking sector also contributes.

“Investors are turning to banks as a benchmark sector now as central banks turn to a more hawkish tone in monetary policy. That the ECB ends up raising rates is good news for the sector,” Ávila stressed.