Goldman cuts Punjab National Bank to 'neutral'

Goldman Sachs downgrades Punjab National Bank to "neutral" from "buy" and cut its target price to Rs 780 from 900, citing a weak economic environment and the elevated stress asset levels at the lender.

Also Read: Goldman Sachs closes bids for exiting Four Seasons property "We believe current valuations adequately reflect the lower return profile we expect and a re-rating is unlikely until one or both of these factors show decisive recovery," Goldman said in a note dated Tuesday. Goldman expects PNB's impaired assets to increase to 15.9 percent by the end of fiscal 2014, from 14.5 percent in fiscal 2013, the highest in its coverage. PNB's shares are down 4.4 percent at Rs 627.30 as of 11.36 a.m.