The rise in rates gives wings to Intesa Sanpaolo’s accounts and analysts rush to revise the valuation on the stock upwards. Today the Intesa Sanpaolo marks + 2.6% in the 2,119 euro area, on maximum since early March. From the annual lows (€ 1.58 touched in mid-July) the stock has risen by more than 33%. On Friday the stock had rallied by 4.8% with the important bank from 3rd quarter numbers, which showed a profit beyond expectations. On the revenue side, Equita analysts remarked today, positive surprise from the interest marginwhile commissions are broadly in line with expectations and lower trading.
Advance coupon richer
Increased the amount of‘interim dividend 2022 (payment date 23 November) from 5.8 euro cents per share (1.1 billion) to 7.4 (1.4 billion), corresponding to a yield of 3.6%. The decision on the launch of the second 1.7 billion tranche of the buyback will be taken with the results for the whole of 2022.
One emerged from the conference call sensitivity to rate hikes it is much higher than expected. In particular, with the 1-month Euribor at 2%, the additional benefit expected to NII is seen at around 2 billion. For this reason, management expects a 2023 NII of over 11 billion. Fees are expected to recover from 3Q22 levels, while costs are expected to remain under control. Even in the event of a significant deterioration in the economic scenario, the CoR is expected to be <60bps.
No explicit guidance on 2023, but management expects a significant acceleration thanks to the contribution from the interest margin. Given the interest rate scenario, management expects to exceed the 2025 Net Income target of € 6.5 billion.
Analysts raise the bar, room for another + 20% on the stock market
Equita has therefore decided to revise its estimates on Intesa mainly to take into consideration a benefit to NII from a higher rate hike than expected. In particular, that on net profit in 2022 was raised by 12%, while for the two-year period 2023-24 by 10% on average. The new target price indicated by the Milanese sim is € 2.9 per share with a confirmed buy recommendation.
Several brokers revised the target price on Intesa upwards. Societe Generale raised the target price from 2.1 to 2.3 euro (rating buy); Oddo from 2.65 to 2.75 euros; Kepler Cheuvreux from 2.25 to 2.5 euros; Barclays from 2.3 to 2.5 euros; Exane BNP Paribas from 2.3 to 2.5 euros.
Looking at the consensus su Bloomberg the majority of analysts (71.4%) give a bullish indication (“Buy”), while 28.6% is “Hold” and no one has a bearish view (“Sell”) on the stock. The 12-month target price is € 2.54 per share and this implies a potential return of over 20% from current prices on the Italian Stock Exchange.