BofA raises target on Turkish banks

Bank of America has updated its target prices for Turkish banks. BofA analyst David Taranto wrote that private banks are “poised for revaluation,” citing expectations of a recovery in the sector in the second half of 2024, which he called a “transition year.” Taranto raised his earnings per share estimates for Turkish banks by an average of 14 percent for the 2024-2026 period. The analyst wrote that the “muted” profitability in the first quarter will be offset by a rapid recovery after June, and that next year looks “promising” as inflation declines and book value growth will outstrip annual profits. BofA forecast a 57 percent return in lira terms and a 20 percent return in dollars for private banks. Earlier this month, Goldman Sachs also raised its earnings estimates for Turkish banks. BofA maintained its buy recommendation for Akbank, Garanti, Yapı Kredi and İş Bankası, while maintaining its under-index recommendation for public banks Halkbank and Vakıfbank. Bank of America's analysis listed the new target prices as follows: Bank Old target price New target price Akbank 53.5 66 Garanti BBVA 78 99 Yapı Kredi 28.5 36 İş Bankası 34.5 42 Halkbank 10 9.5 Vakıfbank 14 15