UniCredit at historic highs, analysts raise targets to 39 euros

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Between the expectation of accounts exceeding expectations, the support of the buyback and the air of a close risk, the UniCredit stock continues to run on the stock market. And it reaches unprecedented levels. Shares in Piazza Gae Aulenti reached 27.8 euros, to close at 27.16 euros, up 0.46 percent, and thus reached a new historic high. At these prices, the bank’s capitalization has broken through to 47 billion, a value that has effectively tripled since the time of CEO Andrea Orcel’s inauguration in February 2021.

Analysts’ estimates

The bank’s run is there for all to see. In 2023, the stock has already appreciated by approximately 50% against the +16% of the Ftse Mib, and since the beginning of the year the progress is already 8 percent. And despite this already impressive run-up, the bank continues to have the wind in its sails and the favor of the entire market. The consensus of business house analysts, recorded by Bloomberg, sees an average target price set at 33.04 euros, with 85% of analysts assigning a “buy” rating, 15% a “hold” rating and no “sell”. Among the most positive, the opinions of the broker Jefferies stand out, which sets the target price at 39.90 euros, and Morgan Stanley, at 36 euros. Intermonte, however, appears more cautious, with the target price at 27.10 euros, and Deutsche Bank (27.90 euros), which in recent days has revised its rating downwards to “hold”: for the investment bank German there is no room for possible surprises in terms of capital returns, which are already remarkably generous.

The reasons for the increase

Behind the progress of the stock there is obviously the change of direction implemented in recent years by CEO Andrea Orcel, who with the UniCredit Unlocked plan has guaranteed the distribution of 16 billion euros and in 2023 has taken into account the distribution of “at least” 6.5 billion euros, not counting the over 10 billion in excess capital to be redistributed to shareholders or to carry out any acquisitions. Part of the support then comes from the buyback of own shares which leverages a still relatively low valuation of the stock, thanks to a stock worth 0.8 times the tangible net worth and a P/E of around 5x (which implies a return on the profits of 20%).

The Stock Exchange, the indices of 25 January 2024

The expectations

Orcel’s moves, if any, will be seen shortly. On Monday 5th the veil will be lifted on the accounts of the last quarter of the year and there it will be understood if and to what extent the bank will be able to positively surprise the market and outperform the objectives of the industrial plan, also in terms of generosity towards shareholders. But the other test bed will be the topic of M&A: from Central-Eastern Europe to Italy – where there is no shortage of potential targets between BancoBpm, Bper and Popolare di Sondrio – for the banker it is a question of understanding when and under what conditions to move . To amaze the market once again.