Two Brokerages Set High Price Targets for Bank Central Asia Shares After Strong Performance
Main Takeaways
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JAKARTA, investortrust.id – Two brokerages reaffirmed their buy recommendations for PT Bank Central Asia Tbk shares, following the company's robust financial results through February 2025, which saw an 8% rise in bank-only net income to Rp 8.97 trillion ($548 million). This performance positions Bank Central Asia among the leading profit growers in Indonesia's top-tier banking sector, signaling strong financial health and promising prospects.
PT Bank Central Asia Tbk, or BBCA, also reported a resilient Net Interest Margin (NIM), standing firmly at 5.9% through February 2025. Interest income remained solid, increasing by 5% from Rp 14.15 trillion to Rp 14.86 trillion. The bank also continued to see steady loan and Current Account Savings Account (CASA) growth, each at approximately 4%.
BRI Danareksa Sekuritas noted in its daily research that Bank Central Asia’s realized profit through February already reflected 15% of the brokerage’s full-year profit target. The brokerage highlighted the bank’s stable cost of credit (CoC) at 0.4%, despite increased provisioning.
"We see Bank Central Asia's performance through February as neutral, with strong NIM and low credit costs effectively offsetting rising operational costs," concluded BRI Danareksa Sekuritas analysts Victor Stefano and Naura Reyhan Muchlis in their daily research note. The brokerage maintained its buy recommendation, setting a price target of Rp 11,900 for BBCA shares.
Similarly, Verdhana Sekuritas also maintained its buy recommendation with an even higher target price of Rp 12,600 per share. This valuation is based on a DuPont analysis, utilizing parameters such as a risk-free rate of 6.5%, an equity risk premium of 7.8%, a beta of 0.8, and a Capital Adequacy Ratio (CAR) adjusted Return on Average Equity (ROAE) of 24.5%. This target price implies an estimated Price-to-Book ratio (PB) of approximately 5.4 times.
Regarding Bank Central Asia's financial performance through February, Verdhana Sekuritas projected that its net profit growth would be the highest among major Indonesian banks. The brokerage attributed this optimistic outlook to the company's ability to maintain a NIM of 5.7%, driven by rising asset yields and effective management of funding costs.
The firm also praised the bank’s disciplined approach to credit costs, which remained stable at 40 basis points, reflecting robust asset quality.
"We observe that Bank Central Asia's results up to February 2025 indicate stability despite ongoing economic challenges," Verdhana Sekuritas concluded in its analysis.