On Friday, Goldman Sachs (NYSE:GS) adjusted its price target on Bendigo & Adelaide Bank Ltd (BEN:AU) (OTC: BXRBF) shares, moving it to AUD10.51 from the previous AUD9.74, while maintaining a Neutral rating on the stock. The adjustment follows the release of the bank's trading update and its March 2024 quarter Pillar 3 disclosures.
The bank reported unaudited cash earnings after tax for the ten months leading up to April 30, 2024, of approximately AUD464 million, marking a 2% decline from the previous corresponding period.
However, these figures surpassed Goldman Sachs and Visible Alpha Consensus estimates for the full fiscal year 2024 by 8% and 9%, respectively, when adjusted for the number of days in the reporting period.
The better-than-expected performance was attributed to an improvement in pre-provision operating profit (PPOP) and a reduction in bad debt expenses (BDDs). Bendigo & Adelaide Bank's net interest margin (NIM) for the year to date stood at 1.87%, which is higher than the prior full fiscal year 2024 estimates of 1.85% from Goldman Sachs and 1.83% from Visible Alpha Consensus.
Additionally, management indicated that the net interest margin for April 2024 exceeded the average for the year to date, suggesting an upward trend in profitability towards the end of the period.
The bank's Common Equity Tier 1 (CET1) ratio as of March 2023 was reported at 11.12%, which also shows a stronger performance than the previous Goldman Sachs estimates for the fiscal year 2024.
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