With negative bond yields across much of Europe and historically low valuations in the banking sector, it’s not hard to find apparent bargains among European banks. The real trick here, though, is separating the real bargains from the likely value traps. I don’t want to underplay the risk that weak rates will have a lasting negative impact on earnings, but I believe Danske Bank (OTCPK:DNKEY) is undervalued today on the basis of low-to-mid single-digit pre-provision profit growth over the next three to five years, a solid collection of fee-generating businesses, and above-average credit quality.
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Despite Significant Near-Term Growth Challenges, Danske Bank Looks Undervalued Today
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