HSBC says it still sees pressure on interest margins and moderate growth as headwinds for short-term income from Spanish banks that have not yet been fully reflected in consensus forecasts, although it raises its recommendation for Banco Sabadell to “buy” from “hold”.
The broker believes that Sabadell’s return on equity including tangible items (ROTE) ratio will improve at a faster rate than its peers over the next two years, thanks to cost reductions and to the boost of its British unit TSB, mainly due to interest margins.
Banco Sabadell today leads the increases in the IBEX 35, with an advance of 3.4% at 0.6840 euros at this time. According to the analyst Ramón Bermejo, we must watch that the market can continue to rise in the acceleration channel, which we see in the graph.
The price could, according to its chart, reach 0.7329 euros with a resistance level at 0.7434 euros. It has an upside potential of just over 9%.
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