Bank of America Merrill Lynch downgrades Paragon to neutral
Bank of America Merrill Lynch downgraded Paragon Group to ‘neutral’ from ‘buy’ and cut its price target to 470p from 500p.
Financial Services
13,974.26
16:29 25/04/24
FTSE 250
19,591.15
16:29 25/04/24
FTSE 350
4,432.51
16:30 25/04/24
FTSE All-Share
4,386.10
16:34 25/04/24
Paragon Banking Group
690.00p
16:35 25/04/24
“Whilst we are supportive of Paragon’s longer-term plans we think near term the shares have now re-rated enough and with our earnings per share expectations pulled back somewhat we downgrade,” said the bank.
The bank reduced its 2015 earnings per share estimate to 34.42p from 36.52 and its 2016 estimate to 39.17p from 40.95p.
It said that although the first half of the year has seen a strong start in mortgages, there’s been a slip in momentum at Idem Capital.
“While we always saw a passing of the baton between the two businesses as inevitable, we are increasingly worried that management is overly optimistic about its ability to maintain the targeted momentum in Idem in the face of increased competition and reduced supply,” the broker said.