Barclays raised earnings per share (EPS) estimates for Italian banks by 6%-16% for 2022 and 2023 as ‘higher rates increase interest margin’, and raised recommendation on Banca Monte dei Paschi di Siena from underweight to equalweight with a target price set at 2.4 euros (10% upside compared to current prices).
Barclays analysts estimate a 2023-2024 Rote of 5.1-5.6% for MPS and a Cet 1 ratio of 13.8-14.1% in 2023-2024. “Considering the current valuation” of the stock, “we see MPS trading close to fair value. Upside risks could come from cost savings (which are a positive distinctive feature compared to Italian peers due to the personnel outflow measures implemented by MPS in 2022) and more generally from M&A “, the analysts explain. On the contrary, downside risks could arise in the event of lower than expected revenues, connected to the “complex restructuring”, add the Barclays experts.