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Challenger bank Aldermore pushes higher as Deutsche Bank hikes target price

Aldermore's target has been raised to 257p from 194p, with the broker seeing further upside potential even though the stock is up 38% since September.

In reaction, Aldermore shares were up 3.4%, or 7.7p at 236.0p in mid-morning trading
In reaction, Aldermore shares were up 3.4%, or 7.7p at 236.0p in mid-morning trading

Challenger bank Aldermore Group PLC (LON:ALD) pushed higher today as Deutsche Bank hiked its price target and repeated its ‘buy’ rating on the stock.

In a note to clients, the broker’s analysts noted that Aldermore’s shares are up 38% since the beginning of September “amidst an improved perception of the UK economy, and a better than expected 3Q16.”

But, they added: “We think there is still upside from here, driven in particular by falling funding costs.”

As a result, they hiked their price target for Aldermore to 257p from 194p.

In reaction, Aldermore shares were up 3.4%, or 7.7p at 236.0p in mid-morning trading.

The Deutsche Bank analysts noted that on “today’s advertised deposit rates, we estimate a flow cost of deposits of c.1%, compared with 1.8% at 1H16.”

They added: “We expect the majority of this benefit to flow through over the next two years, helping offset asset pricing pressure and providing Aldermore with a stronger buffer against falling margins than other UK peers.“

Quick facts: Aldermore

Price: - -

AIM:ALD
Market: AIM
Market Cap: -
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