We have upgraded our long-term Komercni banka recommendation from HOLD to ACCUMULATE. At the same time, we have very modest expectations regarding how much the government’s upcoming pre-privatization assistance will directly benefit KB. We consider the stock vulnerable in the short term (given the high short-term valuation), and advise taking advantage of the stock's volatility to accumulate the stock. Our twelve-month target price is CZK 955 per share (10% above the current price of CZK 869). Our short-term hold recommendation remains unchanged.
Ondřej Daťka