Business Irish

Thursday 13 December 2018

FBD and AIB downgraded by Merrion

FBD chief Fiona Muldoon
FBD chief Fiona Muldoon
Ellie Donnelly

Ellie Donnelly

The share ratings for FBD Insurance and AIB have been downgraded by Merrion Stockbrokers.

A "hold" recommendation has been placed on FBD shares at €9.70, suggesting that the insurance company has reached its target price.

"FBD has rallied by 13pc since we recommended it as a "buy" as recently as 24 October. Valuations are now fair with the stock trading at 1.4 times its book value and expected to report a 10pc-11pc return on equity," Merrion said.

Meanwhile the stockbroker has reduced its recommendation on AIB to "market perform".

"On the 15 September AIB shares had corrected to €4.79 and we highlighted that this was a good opportunity to accumulate their shares. Since then AIB has returned 12.7pc," the stockbroker said.

"Given that AIB’s valuations now look fully valued once again, we downgrade our recommendation to market perform".

The stockbroker noted that the Central Bank review of the tracker mortgage examination was ongoing, however it said that although the banks had taken significant provisions, it was not fully sure at this stage what the final compensation requirements that the Central Bank will enforce on the banks.

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