RBC Capital Markets upgrades Metro Bank to 'outperform'
By Michele Maatouk
Date: Tuesday 19 Aug 2025
(Sharecast News) - RBC Capital Markets upgraded Metro Bank to 'outperform' from 'sector perform' on Tuesday and reiterated its 155p price target.
"We introduce our FY28 estimates, when we expect the bank will deliver a progressive and attractive return on tangible equity (18.2%), despite being conservative in our assumptions relative to management guidance," it said.
RBC's estimates now include that Metro will start to pay a small dividend from FY27, which it said was "an important sentimental development".
The bank noted that on a two-year-forward P/TBV basis, Metro is trading at 0.65x, a 0.34x discount versus UK peers, despite RBC's expectation that it will deliver a reported ROTE of about 16.1/18.5% in FY27/28E, respectively - versus UK peers' average of circa 140%.
"If we were to value MTRO off our FY28 estimates, it would imply a theoretical value of 190p," RBC said.
At 0910 BST, the shares were up 3.7% at 124.40p.
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