JP Morgan ups Bank of Cyprus target to EUR 18

JP Morgan has increased its price target on Bank of Cyprus shares to EUR 18 per share from EUR 14 previously following a spectacular increase in profitability by the Bank in the first quarter and amid increasingly bullish prospects for the future.

JP Morgan is now topping the list of analyst forecasts on Bank of Cyprus as its forecast is significantly better than the EUR 16 per share price target issued a day earlier by Citigroup and Deutsche Bank.

The US investment firm has also increased its 2007 estimates by 12% from EUR 0.74 per share to EUR 0.82 per and for 2008 from EUR 0.94 per share to EUR 1.01 per share. For 2009, the earnings estimate is EUR 1.34 and for 2010 to EUR 1.71 per share.

JP Morgan welcomes the expansionary drive spearheaded by the Bank’s management, which has created value and improved prospects with particular reference to the expansion plans into Russia and the prospect that it may well become one of the 10-15 largest banks according to its deposit base.

The price target of EUR 18 per share on Bank of Cyprus issued with a one year investment horizon and is supported by the spectacular increase in loans by 23% and by 28% in the next three years. The forecast is also supported based on the promise that the margins will continue to improve.

JP Morgan also notes in its investment note that any takeover or merger without a significant premium will have a negative impact on the value of Bank of Cyprus.