Numis upgrades Investec to 'buy' and cuts earnings forecasts

25th Aug 2015 14:22

(ShareCast News) - Analysts at Numis have upgraded Investec to 'buy' from 'hold' and said the dual listed bank was undervalued.Numis cut its target price by 9.2% to 605p from 666p, and said recent equity market concerns and weakness in the South African rand had negatively impacted its forecast earnings.Analyst James Hamilton said Numis dropped its earnings per share forecasts for the current year by 15.3% to 42.2p from 49.8p.Hamilton said the operating environment for the South African bank's UK division continued to be positive its share of group profit would grow from its low base."While market moves are unhelpful for the asset and wealth management businesses we believe they continue to achieve good underlying organic growth," the analyst said.Numis said Investec's current valuation was "just far too low.""We believe the share of UK profit will grow strongly over our forecast period. Furthermore we believe the market is currently, effectively valuing the South African bank at zero," Numis said.