Grupo Financiero Banorte SAB (GFNORTEO), Mexico’s third-biggest lender by loans, fell the most in six months after JPMorgan Chase & Co. cut its recommendation to the equivalent of hold from buy, citing the stock’s valuation.
Shares of Banorte fell 4 percent to 60.73 pesos at the close of trading, the biggest slide since Oct. 17. The benchmark IPC index declined 0.1 percent.
Banorte’s 44 percent rally this year makes it the top performer on the country’s benchmark equity gauge, which has climbed 6.1 percent. The shares closed April 16 at 17 times trailing 12-months earnings, the highest in a year.
“We no longer find the valuation sufficiently compelling to recommend the shares,” JPMorgan analysts led by Saul Martinez wrote in the report. “We continue to believe Banorte is well positioned to generate healthy bottom-line growth and profitability” in the coming years, Martinez said.
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