RBC Capital thinks Virgin Money consensus is 'too bearish'
RBC Capital Markets has given the previously unrated Virgin Money an 'outperform' along with a 415p price target, as it thinks that consensus estimates are too bearish on the bank's margins, growth and cost of risk.
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Virgin Money Holdings (UK)
349.30p
16:34 12/10/18
RBC believes that Virgin Money can take market share and outperform in the uncertain economic environment as it has low interest rate sensitivity and risk profile.
It added that Virgin Money “is a unique investment opportunity with positive characteristics of a large cap bank and a small growth stock” which it thinks will “fare well in a lower for longer uncertain economic environment”.
It said that even as the UK slows, Virgin Money’s market share gains would be able to drive growth and maintain a double digit return on tangible equity.
According to RBC's analysis Virgin Money trades at 0.9 times the 2019 estimated tangible book value and 6.9 times the price/earnings ratio.
Shares in Virgin Money were up 2.74% to 338p at 1008 GMT.