Davy forecast healthy for AIB

BANK of Ireland's in-house stockbroking company, Davy, has issued a very positive buy recommendation on arch rival AIB Bank, forecasting a healthy 20% share price gain.

In a detailed 28 page ‘AIB - a model overhaul’ report Davy analyst Scott Rankin and Emer Lang said: “Our sum of the parts driven price target is 1510c, which is 20% ahead of the current share price. Alternatively, if we strip out the value of M&T and BZWBK, which represent one quarter of the bank’s market value, investors are valuing AIB’s core Irish and UK business at just 9.8x. This seems extremely harsh for very profitable and growing businesses.”

Davy’s 2003 EPS forecast remains unchanged at 115c.