Investment recommended: Due to the update of our MONETA Money Bank company model, we have adjusted the tariff price. Our new target price for Moneta shares is CZK 104.6 recommended Buy. It is recommended to leave without change, the customs price has decreased from CZK 109.7 (effective 31 August 2021). Moneta’s shares are trading relatively low when compared to comparable banks. The coin is valued at P/B 1.3x, P/E 9.4x and P/S 3.4x. Comparable banking houses trade at multiples of 0.8x, 6.3x and 0.9x respectively. However, the currency offers you the profitability of your own capital in comparison with the competition, and we expect that it will thus pay you dividends. We therefore consider Moneta’s premium to be reasonable.
The company’s economy and expected development: Amidst the current high annual rates, it is important for the banking sector, moreover, this fall, a small amount of hidden money was added to the policy. It should have a positive effect on the growth of certain annual income. in a few years mare should continue to be well above comparable banks. We consider the risk of introducing a special tax for the banking sector to be very high. Conservatively, let’s assume that there will be an increase in the income tax rate for the next two years. We estimate that it should increase from the current about 20% and reach 40%. This, of course, will affect certain profits in both years. This year, we expect a profit equal to CZK 4.8 billion and CZK 3.5 and 3.6 billion in 2023 and 2024, respectively. If the special tax did not fall, Moneta would report, according to our estimate, 4.6 and 4.9 billion CZK. Neither the profit nor the paid dividends are affected.
Moneta’s dividend policy is to distribute a minimum of 70% of certain profits. Clem management is to fill in at least 80%. Due to regulation by the NB, this year, for the first time in two years, dividends have to be paid. For the following years, we assume a conservative payout ratio equal to 80% of certain profit. Moneta paid out CZK 7 per share from the 2021 profit. We estimate CZK 7.5 per year (from profit 2022). However, in the following two years, 2024 and 2025, the payment should drop to 5.4 and 5.7 CZK due to the introduction of a special tax. As a result, according to our estimates, the dividend will be around CZK 8, and the gross dividend yield should exceed the 9% mark. In addition, Moneta has surplus capital of around CZK 5.2 billion (CZK 10.2 per share), including CZK 2.3 billion for future dividend payments.
Valuation of the company: To determine the share price, we used the average of three methods: (1) excess return model, (2) dividend discount model and (3) discounted cash flow model. Compared to the actual price of the Coin on the stock exchange, our tariff price offers a total return of 53.1%, which is a recommended purchase.