Buy Canara Bank, target price Rs 124: IIFL Securities

IIFL Securities recommends buying Canara Bank shares with a target price of Rs 124, indicating a potential upside of 4.2%. The current market price is Rs 118.9. This buy call is based on the bank's strong fundamentals, such as healthy asset quality and robust credit growth. Canara Bank has consistently outperformed its peers in terms of profitability and asset quality. Its recent financial results have also been encouraging, further supporting the buy recommendation.

About Canara Bank:

Canara Bank is one of the largest commercial banks in India, with headquarters in Bengaluru. Established in 1906, it offers a wide range of financial services including deposits, loans, and various banking products to its vast customer base. With a strong presence across India and international operations in several countries, Canara Bank plays a significant role in the country's financial sector. Its shares are listed on the National Stock Exchange (NSE) of India under the symbol "CANBK".

52 Week Price Trend:

Canara Bank's current market price (CMP) of Rs 118.9 reflects a significant decline from its 52-week high of Rs 598.8. This sharp drop indicates a challenging period for the bank, potentially attributed to macroeconomic headwinds and banking sector-specific factors. Despite this, Canara Bank has maintained a relatively stable position above its 52-week low of Rs 272.3. Investors may be cautiously optimistic about the bank's long-term prospects, given its strong fundamentals, extensive branch network, and focus on retail and SME lending. However, they should also be aware of the potential risks and uncertainties associated with the banking sector and closely monitor the bank's performance and market environment.

Stratzy's MOST Analysis:

CANBK has received an AAA rating from Stratzy's MOST framework, indicating that it poses a low fundamental risk. The MOST framework assesses stocks based on management, outlook, safety, and trend. CANBK's strong performance in all four categories has resulted in an overall score of AAA, suggesting that it has a solid management team, a positive outlook for growth, a safe financial position, and a favorable market trend.

Company's Fundamentals:

Canara Bank, listed on the National Stock Exchange (NSE) under the symbol CANBK, has a stock PE ratio of 7.09. This indicates that the share price is trading at 7.09 times the company's annual earnings per share. The PB ratio of 1.33 suggests that the market value of the company is 1.33 times its book value, implying that the stock is slightly undervalued compared to its assets. Lastly, the dividend yield of 2.09% represents the annual dividend paid per share divided by the current stock price, indicating the income investors can earn from owning the stock.

Fundamental and Technical information provided in this blog were last updated on 31 May, 2024

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