27/05/2022 15:20
The latest round of quarterly reports saw the banks of Piazza Affari churn out overall positive results, with most of the banks beating the estimates. In an update report on the sector, Equita reinforces the constructive view, with the recent performance that does not fully discount the increase in expectations of a rise in rates. “The quarter has not yet shown particular elements of discontinuity on the interest rate front, the increase of which – if not combined with a
economic recession – in our opinion constitutes the main upside risk on our estimates and those of the market “, argues the Milanese sim.
Equita maintains a conservative approach on net interest income. His estimates incorporate on average an increase in rates of 80-90bps at the end of 2023 from 2021, consisting of a Euribor 3M 2023 at 0.4%, i.e. around 30bps below what indicated by the forward curve (Euribor 3M> 0.7% at the end of 2023). “Incorporating in our estimates a further increase in rates of 35 bps in the period YE21 and YE23 – in line with the current forward curve – the EPS 2023E would increase on average by about 15%, other things being equal”, explains Equita.
Since the end of the first quarter, the sector has performed positively (+ 5%) “not fully discounting the implicit benefit linked to the change in expectations of a rise in interest rates”, asserts today’s report from Equita which maintains an overall positive view on the sector (P / TE = 0.5x). “In particular, Italian banks are approaching a more challenging scenario in a good position both in terms of capital and asset quality and, unlike in the past, the interest rate environment could finally be supportive and not yet adequately discounted by recent market movements “.
Among the blue-chip stocks, Equita is buy on Banco BPM, Unicredit, Intesa Sanpaolo and Mediobanca, while Credem is the preferred name among the mid-caps.