INVESTMENT CASE
Following our analysis of CDM's achievements at the end of September 2024, we have revised
upwards our forecasts for 2024E-2026E, compared to those communicated by Management in
the SPO last November. The key takeaways are as follows:
- We believe that CDM's achievements for 2024E will surprise positively the market, both in
terms of profit growth and dividend; - Taking into account a faster-than-expected catch-up effect on loan activity combined with
better cost control, the bank would be able to post a profit growth of +40.0% in 2024E
compared to an initial forecast of +32.0%. In consequence, the DPS for 2024E would be
better than expected; - With sustainable earnings growth, i.e. a CAGR of +18.9% over 2023-2026E and a stable
payout ratio of 70%, CDM stock will benefit from an attractive positioning in terms of the
"P/E-D/Y" couple. In more detail, the P/E 26E(1) stands at 13.5x in comparison to a
fundamental target of the banking sector of more than14.0x. The stock average D/Y(1)
over the 2024E-2026E period would amount to 4.7% compared to an average of 3.4% for
the listed banks; - At the end of our valuation exercise, we are revising upwards the target price of CDM
stock to MAD 1,253 compared to MAD 1,100 initially. This represents a potential of +17%
over the next 12 months compared to a market price of MAD 1,069 as of 01/27/2025.
Therefore, we recommend BUYING the stock.
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