BEN – Macquarie rates the stock as Downgrade to Underperform from Neutral

Macquarie reviews impairment forecasts. With 10-15% of consumer and small-medium enterprise loans being deferred, along with a weak economic outlook, there is downside risk to bank earnings.

While recognising the risk of a relief rally as the sector is at a deep discount to its long-term history, in the medium-term Macquarie expects banks will deliver lower underlying returns.

Bendigo and Adelaide is downgraded to Underperform from Neutral and the target reduced to $6.25 from $6.50.

Sector: Banks.

Target price is $6.25.Current Price is $6.62. Difference: ($0.37) – (brackets indicate current price is over target). If BEN meets the Macquarie target it will return approximately -6% (excluding dividends, fees and charges – negative figures indicate an expected loss).

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