What’s MM’s opinion on VUK?

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Question asked 17/03/2023

What’s MM’s opinion on VUK?

Dear James / Shawn, Do you have an opinion as to when VUK may become a "buy" ? In the past, you have mentioned that VUK seems to be very cheap. John.

Hi team - On Thursday morning report you said"MM only has an interest in the best-performing global banks as recession fears increase" What is your opinion on VUK in context of this statement. Cheers Alain

Answer

Hi Both,

VUK is undoubtedly an extremely cheap bank compared to its Australian and global peers trading on ~0.3x price to book, compared to say CBA which is trading on 2.2x. However in todays uncertain banking environment we are seeing a clear flock to the “safer” end of town.

We like VUK into current pullback towards $2.60 but we are cognisant that the valuation elastic band may stretch further as panic remains very elevated.
At this stage we would call it an “accumulate” but MM is more comfortable with our ANZ, NAB and MQG.

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Virgin Money (VUK)

LAST UPDATED 22/11/2022 17:06

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