Paint-by-numbers European bank risk from UBS — every colour tells a story.
Green means risk (for that category) is fully discounted in the share price, yellow means risk is partially discounted and red means it’s not discounted at all. The colours (and numerical analysis, of course) leave UBS with Austria’s Raffeisen, Italy’s Intesa, the National Bank of Greece and Societe Generale as their preferred European banking stocks.
If the traffic light-esque colours aren’t enough to grab your attention, here’s something else.
UBS also sees a glimmer of impending recovery for Europe’s banking sector:
2008 has been a terrible year for performance and the fundamental outlook for 2009 is little short of dreadful. Prima facie, this would suggest another difficult year for bank stock investors. We are not so sure. Granted it may still be a little too early to adopt a positive view on the sector, but in our view the news from the sector does not have to be good for stocks to rise; it just has to be less bad than the market is presently discounting. We think that the catalysts are coming into place to give rise to a cautiously constructive view on the sector. __________
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Related link:
Is it really different this time? - FT Alphaville
