On Wednesday, Crédit Agricole shares were the second-biggest gainer on the CAC 40 index, thanks to a recommendation upgrade by Jefferies.

Shortly before 2:00 pm, the stock was up 2.4%, while the STOXX Europe 600 Banks European sector index was up 1.5% at the same time. Also in the financial sector, BNP Paribas gained 1.5% and Société Générale 1.1%.

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

Beyond the capital reduction, the broker says it considers the French institution to be a 'high-quality' player able to leverage its integrated model of insurer, asset and wealth manager and investment services provider, while also seeing it as an influential player in urban areas.

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

Consequently, it has raised its recommendation on the stock from 'hold' to 'buy', with a target price raised to 21.6 euros from 13.4 euros previously.

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