Expected record: why investors sold Sber shares after the announcement of dividends
- Elena Ruzleva Forbes Editorial
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Photo by Sergei Karpukhin/TASS On April 23, Sberbank announced the amount of dividends for 2023. The bank will pay 33.3 rubles for each type of shares – this is a record in the history of the credit institution. And this is exactly the level of payouts that the market as a whole expected. How did investors react to this news and what are the prospects for the stock?
Sberbank will pay record dividends based on the results of 2023 – a total of about 750 billion rubles, or 50% of net profit, the bank’s supervisory board made this recommendation on April 23. On a per-share basis, payments will be 33.3 rubles for both types of securities. The dividend yield, based on quotes as of April 23, will be about 10.6%. The recommendation on dividend payments must still be approved by Sber shareholders; the meeting will be held on June 21. And the closing date for the register of shareholders to receive payments is July 11.
In anticipation of dividend news, Sber shares rose by about 2.5% the day before. However, after the announcement, the dividend recommendations switched to a reduction and lost about 2% of the growth gained the day before.
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Investment strategist of Arikapital Management Company, associate professor of a financial institute under the Russian government, Sergei Suverov, believes that some investors expected more generosity from Sberbank and the distribution of not half of the profit, but a larger volume. This is how investors interpreted Mikhail Mishustin’s words about a “fairer” distribution of bank profits in response to the proposal of State Duma deputies to increase taxes for the financial sector. Nevertheless, Sber this time remained faithful to its dividend policy; this could have disappointed some investors, which provoked a correction, admits Suverov.
Veles Capital Investment Company analyst Elena Kozhukhova believes , there is no need to talk about disappointment with the level of dividends: payments were supposed to be record-breaking with prospects for their increase by the end of the year. Nevertheless, market participants took profits, since the level of payments was expected, says Kozhukhova.
How do analysts evaluate Sberbank shares after the dividend recommendation?
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Still underrated
Sber shares have been growing since December last year along with the Moscow Exchange index, Go Invest analysts write in a commentary to Forbes. At the same time, fundamental estimates and consensus forecasts for Sberbank shares are still higher than current values, they add. That is, the shares still have room to grow.
In 2021, before the “special operation”* in Ukraine, Sberbank securities reached the level of 350 rubles – this was a historical maximum. Then they were adjusted, on the eve of the start of the “special operation” at the closure of the paper they cost 211 rubles, and on the first day of the start of the conflict they fell by half. Therefore, the current level, approximately 310 rubles, is still below the historical maximum.
“Despite strong growth over the past year, Sber shares are still trading at a significant discount compared to both their peers from emerging markets and their own historical values,” notes Finam FG analyst Igor Dodonov. Despite the fact that the dividend yield on Sber shares is below 11%, Dodonov calls this indicator “very attractive” for a company of such high capitalization. He believes dividends will continue to support the bank's shares.
Digit Broker analyst Natalia Pyryeva believes that closer to the dividend cutoff, when the register of shareholders for receiving dividends is closed, buyers of Sberbank shares become more active. And in general, she has an optimistic view of the company's shares as the largest player in the banking sector. “The bank holds almost 50% of the market share in lending to individuals and about a third to legal entities. At the same time, Sberbank has historically shown results that are ahead of its competitors, in particular in terms of net interest margin,” she says.
The bank’s future prospects lie in the development of its ecosystem, says Konstantin Asaturov, managing director of the department for working with shares of Sistema Capital Management Company. He notes the company's activity in the field of artificial intelligence. So far, according to him, this does not greatly affect the profitability and other financial indicators of the bank. But Asaturov assumes that this work will have an effect in the future and will allow Sberbank to both strengthen its position in the market and increase business efficiency.
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What should an investor do?
< p itemprop="articleBody" data-index="18" data-type="paragraph" class="ywx5e Q0w8z" style="text-align:left;">Konstantin Asaturov also admits that the development of Sberbank will encourage its competitors represented on the Moscow Exchange to invest in their own ecosystems and services. And in addition, the dynamics of Sber shares can also support other securities of the financial sector.
The next major event that could affect the stock will be the disclosure of quarterly results under IFRS, which will occur on April 26, says Olga Naydenova, senior analyst at the Sinara investment bank. She expects strong results with a return on equity of 23.5%. The target price for Sber shares, in her opinion, is 360 rubles.
According to Finam analyst Igor Dodonov, Sber shares of both classes can rise to 348.5 rubles; Finam offers to “buy” the bank’s shares. Natalia Pyryeva from Digit Broker is close to this estimate, her target price by the end of 2024 is 350 rubles. At the same time, she warns that investors need to be careful – a correction is possible in the market before the May holidays.
* According to the requirement of Roskomnadzor, when preparing materials about a special operation in eastern Ukraine, all Russian media are required to use information only from official sources of the Russian Federation. We cannot publish materials in which the ongoing operation is called an “attack,” “invasion,” or “declaration of war,” unless this is a direct quote (Article 57 of the Federal Law on the Media). In case of violation of the requirement, the media may be fined in the amount of 5 million rubles, and the publication may also be blocked.
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Elena Ruzleva
Forbes editorial staff
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