ABN AMRO: Another guidance increase likely in Q2. Buy.

Research evidence excerpt

ABN AMRO: Another guidance increase likely in Q2. Buy.

rated payouts. We expect >100% payout for this year (announced in February

From To % ch Cons.

2027). 12/26E 3.20 3.23 1 2.92

12/27E 3.73 3.75 1 3.54

Changes: Raise EPS forecast and price target 12/28E 4.17 4.21 1 4.23

Ahead of Q2 results we mark-to-market our forecast, reflecting current interest rate

Johan Ekblom, CFAlevels, recent central bank data and equity market performance. We increase our EPS

Analyst

forecasts by around 1% on average, mainly reflecting better fee income trends in wealth johan.ekblom@ubs.com

management. On the back of higher earnings forecasts, mix effects and updated risk +44-20-7568 3580

free rates, we increase our price target to EUR 43 from EUR 42. We reiterate our Buy

Joshua Humphreysrating.

Associate Analyst

joshua.humphreys@ubs.com

Valuation: Trading at 10x 2027E EPS and 1.3x TNAV for a >13% ROTE +44-20-7567 0385

ABN shares have performed well over the last year and have largely closed the valuation

gap to the sector. Having said that, we see a combination of attractive EPS growth and

improved profitability supporting further re-rating. We reiterate our Buy rating and

increase our price target to EUR 43. Our valuation reflects forecast ROTE improvements,

but gives limited credit for sustainable growth – a potential source of further upside to

our valuation.

Highlights (€m) 12/23 12/24 12/25 12/26E 12/27E 12/28E 12/29E 12/30E

Revenues 8,634 8,835 8,690 9,671 10,226 10,521 10,870 11,299

Pre-tax profit 3,544 3,414 3,086 3,644 4,216 4,515 4,844 5,181

Net earnings (reported) 2,606 2,257 2,036 2,488 2,909 3,128 3,370 3,618

Net earnings (UBS) 2,692 2,326 2,151 2,648 2,993 3,203 3,370 3,618

Tier 1 ratio % 15.7 16.9 17.8 17.3 17.1 16.9 16.7 16.5