Yes Bank Limited shares were in the spotlight during Tuesday’s trading session. The stock rose by over 1% today and reached ₹20.18.
However, global brokerage firm Goldman Sachs believes the stock might see a sharp decline in the coming days. According to them, the share price could drop by 25% from Monday’s closing price of ₹19.89.
Details
As per a note issued by Goldman Sachs on Tuesday, June 24, Yes Bank shares may fall by 25% from Monday’s closing level. Over the past month, shares of this Mumbai-based private bank have dropped 4%.
Goldman Sachs has given a ‘sell’ rating on Yes Bank and set a target price of ₹15 per share—this is the lowest target in the market for the stock. Out of the 11 analysts covering the stock, 10 have a ‘sell’ rating, while only Nomura has a ‘hold’ rating.
Goldman Sachs Highlights
Goldman Sachs shared several points after meeting with the bank’s management. These are:
After Sumitomo Mitsui Banking Corporation (SMBC) buys a 20% stake from the SBI-led lender group, the bank could see benefits, especially in the mid-sized corporate segment.
The CEO’s term extension was only for six months. The new board, which will include SMBC nominees, will choose the next CEO.
The bank aims to reach a 1% return on assets (RoA) by FY27. This will be supported by better net interest margins, operational efficiency, and higher non-interest income.
Loan growth is expected to be between 13% and 15%, but the main goal is profitable growth.
What Goldman Sachs Said
Goldman Sachs estimates that Yes Bank will show 14% loan growth and a 3 basis points increase in RoA between FY25 and FY27.
However, for the stock to see a strong upward revaluation, the bank’s return on equity needs to rise above its cost of equity along with consistent loan growth.