Analyst Note| Niklas Kammer, CFA |
No-moat Commerzbank reported third-quarter operating profit of EUR 472 million, ahead of the EUR 364 million the bank polled from analysts prior to its earnings release. We raise our fair value estimate to EUR 7.60 per share from EUR 6 previously. The lion’s share of our fair value estimate change comes from lower operating cost assumptions, after Commerzbank has shown good initial progress in its restructuring program as well as the time value of money since our last model update. As a result of our changes, our midcycle return on tangible on equity for Commerzbank increases to about 4% from 3% previously.