On Wednesday, Jefferies raised its recommendation on Crédit Agricole shares from 'hold' to 'buy', with a price target raised to 21.6 euros from 13.4 euros previously.

In a note, Jefferies justifies its upgrade by a return on tangible equity (ROTE) in excess of 14%, by the prospect of a return to shareholders representing more than 50% of the current valuation in the form of growth in tangible net assets per share and dividends, and also by possible upward revisions to market forecasts.

In addition to questions of capital reduction, the broker considers the French company to be a "high-quality" player, able to capitalize on its integrated model as an insurer, asset and wealth manager and investment services provider, while highlighting its "influential" role in urban areas.

The broker adds that CASA's revenues are less correlated to ECB rate movements than those of other STOXX Europe 600 Banks components, offering potential diversification in the current context of monetary easing.

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