UBS cuts target prices on bank stocks by 5-41%

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ICICI Bank and Axis bank are top picks during this cutdown

Global brokerage firm UBS slashed the target prices on bank stocks by 5% to 41% downgrading its rating on several banks. The risk by ratio reward during these uncertain conditions show a lack of support from the system. They further added that the lockdown in urban areas could be longer than expected and the onset of favorable conditions may get prolonged.

Target price is a price at which an investor believes a stock to be fairly valued while the risk/reward ratio helps these investors to manage the risk of losing money on such trades. And during these unfavorable conditions, there is a clash between the two. With this step of UBS, there is a different impact on different bank stocks.

HDFC Bank Stocks

UBS has downgraded its rating to neutral from buy. And the target price on HDFC stock is cut to Rs 1,000 from Rs 1,075. They also believe that its premium valuation may narrow down in the future giving risks in retail and small businesses.

SBI Bank Stocks

UBS has downgraded its rating on SBI stocks to sell from buy. And the target price on it is cut to Rs 160 from Rs 270. While SBI’s valuation remains inexpensive which may degrade further due to uncertainty in the environment.

ICICI Bank Stocks

ICICI bank stocks maintained their rating buy with a cut in a target price from Rs 430 from Rs 450.

Axis Bank Stocks

According to UBS axis’s stocks are the most preferred ones with a maintained buy rating and reduced target price of Rs 570 from Rs 600.

Bank of Baroda Stocks

Remains the same with a reduced target price of Rs 55 from Rs 60.

Federal Bank Stocks

Shifted to sell rating and has reduced the target price to Rs 45 from Rs 50.

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Jyotika Kumari
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