February 17, 2014 (www.investorideas.com newswire) We update our Bancolombia Target Price to COP 26,500/share. The change is explained by the following: i) the integration into our estimates of Banistmo (HSBC Panama); ii) the incorporation of the issuance of 110 million preferred shares (for approximately COP 2.3 trillion) currently underway; iii) a drop in our net income and ROE estimates; iv) a change in the method for valuing to residual income; and v) the results from a multiples exercise in which we used a regression to estimate the relationship of P/B adjusted for the bank´s return on equity. Finally, we highlight that our Target Price of COP 26,500/share translates to a potential upside of 15.2% and a BUY recommendation.
We are lowering our net income estimates: Recently (On January 31st), Bancolombia published its non-audited financial results for the year 2013, which show for the first time consolidated results including Banistmo´s operations following the acquisition on October 28, 2013 (the most updated information prior to the acquisition was of September of 2012). In this update, we incorporate for the first time in our projections Banistmo´s financial results. In addition, we were disappointed by 2013´s results, especially in net income (12% below our estimates), which has led us to lower our estimates for 2014 and beyond.
Published at the Investorideas.com Newswire - Big ideas for Global Investors
Disclaimer/ Disclosure:The Investorideas.com newswire is a third party publisher of news and research as well as creates original content as a news source. Original content created by investorideas is protected by copyright laws other than syndication rights. Investorideas is a news source on Google news and Linkedintoday plus hundreds of syndication partners. Our site does not make recommendations for purchases or sale of stocks or products. Nothing on our sites should be construed as an offer or solicitation to buy or sell products or securities. All investment involves risk and possible loss of investment. This site is currently compensated by featured companies, news submissions, content marketing and online advertising. Contact each company directly for press release questions. Disclosure is posted on each release if required but otherwise the news was not compensated for and is published for the sole interest of our readers. More disclaimer info: http://www.investorideas.com/About/Disclaimer.asp
BC Residents and Investor Disclaimer : Effective September 15 2008 - all BC investors should review all OTC and Pink sheet listed companies for adherence in new disclosure filings and filing appropriate documents with Sedar. Read for more info: http://www.bcsc.bc.ca/release.aspx?id=6894. Global investors must adhere to regulations of each country.