The following excerpts explain why Zacks senior banking industry analyst Ann H. Heffron, CFA remains bullish on Allied Irish Banks, p.l.c. (AIB) the banking company:
'We are maintaining our Buy recommendation on Allied Irish Banks, p.l.c. (or AIB), as well as our $60 price target as we consider the stock particularly attractive at its current price. AIB is expected to report its third quarter trading update on December 7, 2007.
'We are continuing our diluted EPADS [earnings per American Depositary Share] estimates at $5.50 for 2007 and at $6.10 for 2008. AIB's results should benefit from strong loan growth offset, in part, by increasing loan loss provisions and declining net interest margins due to slow deposit growth and increased competition.
'At it current price, AIB is trading at 8.1X the 2007 estimate and 7.4X the 2008 estimate, based upon consensus estimates for 2007 and 2008, respectively. These are well below the median P/E ratios for the industry, also based on consensus estimates.
'AIB's growth prospects, estimated at 12% over the next few years, are higher than the industry's 11%, as is its dividend yield. Our target price of $60 represents about a 10X P/E based on our 2008 estimate of $6.10 per share.'
(Read the full analyst report on AIB.
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