Credit Suisse cuts Bank Leumi target price, forecasts

Credit Suisse cites the dilutive effect of employee share options and slow loan growth on the bank’s earnings per share.

Credit Suisse Group has cut its target price and forecasts for Bank Leumi (TASE: LUMI), but kept its “Neutral” recommendation for the share.

Credit Suisse said “Our downgrade of Bank Leumi’s earnings per share forecast is based on reduced forecast loan growth, and, most importantly, the dilutive effect of employee share options.” These were the reasons for the cutting its target price to NIS 17.50 in 12 months, down from NIS 19.10. The new target price is 1.5% less than Bank Leumi’s opening price on the Tel Aviv Stock Exchange (TASE) this morning.

Credit Suisse predicts that Bank Leumi will post earnings per share of NIS 1.57 in 2007, down from its previous prediction of NIS 1.76. The 2008 earnings per share forecast was cut to NIS 1.62 from NIS 1.83, and the 2009 forecast was cut to NIS 1.76 from NIS 1.99.

Credit Suisse recommends that Bank Leumi shareholders keep their holdings until the bank pays a dividend equal to a yield of 10% on February 15.

Published by Globes [online], Israel business news - - on January 7, 2007

© Copyright of Globes Publisher Itonut (1983) Ltd. 2006

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