SINGAPORE (Feb 25): Jefferies and OCBC Investment Research are maintaining their “buy” calls on United Overseas Bank (UOB) with a target price and fair value of $30 and $28.30, respectively, even after the bank’s recently reported set of 4Q and FY18 financials came in slightly below both research houses’ expectations.
While Jefferies has lowered FY19-20 EPS estimates by 3.6% and 4.5%, respectively, to account for lower loan growth and margin assumptions, OCBC cuts its net earnings estimates for FY19 to $4.26 billion from $4.36 billion on expectations of continued volatility for the bank’s operating environment.
In a Monday report, Jefferies analyst Krishna Guha highlights the possibility of continued disappointment in UOB’s margin going forward, as mortgage refinancing may see a price/volume trade-off, with limited upside to grow loan/deposit ratios (LDR).
