(Sharecast News) - Analysts at Berenberg lowered their target price on financial services firm Close Brothers from 1,250.0p to 1,200.0p on Wednesday after the group's results underperformed UK banking rivals by roughly 8%.
Berenberg said Close Brothers' banking business continued to perform "strongly" in the six months ended 31 July, with 6% annualised loan growth.
However, weaker-than-expected costs, asset management and the performance of its Winterflood unit saw the group fall short of performances delivered by other UK banks.
"In our view, Close Brothers' strong banking growth outlook and ability to reprice lending to offset rising funding costs support an attractive through-the-cycle outlook," said Berenberg, which reiterated its 'buy' rating on the stock.
"Trading on 5.7x our FY 2024E EPS - a 45% discount to the long-run average - we believe this strength is undervalued."
The German bank also reduced its near-term earnings per share estimates by 7% and outer-year EPS by 2%, largely due to lower Winterflood and asset-management operating profits.
Reporting by Iain Gilbert at Sharecast.com
Close Bros (CBG)