Citi downgrades SocGen on French retail weakness, uncertain recovery
** Citi downgrades Societe Generale SOGN.PA to "neutral/high risk" from "buy high risk", after the bank cut guidance in its French retail segment, and amid uncertainties around the recovery of its profitability
** On Thursday, SocGen cut a key 2024 target for its French retail division, now expecting retail net interest income (NII) of 3.8 bln euros ($4.10 billion), 300 mln euros less than previously forecast
** Citi says the market would have welcomed more details on the outlook cut, to better understand the rationale, especially since peers have been more "constructive"
** The broker nonetheless flags that SocGen is cheaper than peers in the banking sector, which could make it stand out if it shows evidence of profitability improvement
** "The ongoing delay to achieving this (better profitability) leaves us unsure of the timing of an inflection, especially in light of a potentially more challenging environment given the political uncertainty in France" - Citi
** The broker cuts PT by 21%to 26 euros; SocGen closed at 21.83 euros on Thursday
** Out of 23 analysts that cover SocGen, nine rate the stock "strong buy" or "buy", 12 rate it "hold" and two rate it "strong sell" or "sell"
($1 = 0.9263 euros)
Reporting by Olivier Sorgho
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