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UniCredit, Mps, Intesa & Co: outlook, rating e tp

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UniCredit, Mps, Intesa & Co: outlook, rating e tp

Italian banks: Deutsche Bank’s tp and ratings on UniCredit, Intesa, Mps & Co.

The core business of UniCredit, Credem and Banco BPM should allow the three Italian banks to continue to surprise positively on the earnings front, during 2023, thanks to better-than-expected trends in related interest margins (NII). This is what we read in a note from Deutsche Bank dedicated to Italian credit institutions.


The comment presents a positive picture for the Italian banking sector.

However, the performance of shares on the Stock Exchange is also highlighted, which it has not been brilliant in proportion to the NII (interest margins) and better-than-expected net earnings.

Deutsche Bank it also cut Mediobanca’s rating from hold to sell, noting that the stock is traded at a premium compared to the average of the shares of other Italian banks.

Another reason for the downgrade is represented by the fact that the stake held by Delfin in the capital of Piazzetta Cuccia, equal to 20%, could hinder any future M&A operations Mediobanca with other institutions (or any mergers and acquisitions).

The target price of Deutsche Bank analysts on Mediobanca stock is equal to 9.8 euros.

Notified by Deutsche Bank the target prices relating to the securities of other banks:

  • Per Banco BPM, the bank led by CEO Giuseppe Castagna, the target price has been improved from the previous 4.2 to 5.4 euros
  • UniCredit deserves the buy of Deutsche Bank, against a tp equal to 20.2 euros.
  • Strengthened the buy up Intesa Sanpaolo, whose target price goes from 2.9 to 3.2 euros.
  • Rating buy anche su wewith tp at 9.3 euros.
  • Mps Monte dei Paschi instead, it is to be held, against a target price of 3 euros.
  • Upgrade on the tp also on the title Bfor, from 2.6 to 3 euros: in this case, the bank focused on the integration with Carige was assigned a valuation equal to hold.
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Italian banks: the ‘verdict’ of Deutsche Bank

In the note dedicated to Italian banks following the publication of better-than-expected quarterly results, Deutsche Bank analysts highlighted that, although Italian banks reported better-than-expected net profits and interest margins, the reaction of the headlines was proportionally less brilliant.

Only Mps Monte dei Paschi, Intesa SanPaolo and UniCredit managed to do better in Piazza Affari compared to the general trend of bank stocks.

Analysts at the German banking giant have highlighted the greater selectivity on the part of investors.

Investors are starting to distinguish between the qualities of interest margins” of the different Italian banks, and between the way in which the forecasts were beaten, with particular attention to theirs “sustainability moving forward”.


ECB and the ‘treasure’ rates for Italian banks

There has been a lot of talk about Italian banks since the beginning of the year, also for bets on a risk in the sector, which should see the Sienese bank MPS as the protagonist (whose title took off with its frequent rallies)

But we are also talking about banks in reference, precisely, to that interest rate treasure arrived from the ECB which, with its continuous rate hikes launched to try to scuttle the growth of inflation in the euro area, has significantly supported those NII (interest margins) which, throughout the euro area, had discounted the persistence of a policy of the Eurotower which for years had focused rather on negative rates, to the detriment of bank profitability.

European banks: better than the US ones? What the Stock Exchange says

In recent days, a Bloomberg article has summarized the remarkable progress made by lenders in the Eurozone in general, which, on average, they beat analyst estimates for pre-tax earnings by about 13%.

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The key factor – explains the article – it is summed up in the acronym NII or in the interest margin, which beat consensus forecasts by around 6%. And a reference is made to the two Big Banks of Made in Italy: UniCredit and Intesa SanPaolo, “who witnessed annualized net interest income growth of more than 40% during the fourth quarter (of 2022); for the industry as a whole, NII’s average growth was around 30%.

Bloomberg recalled in the article that, “For more than a decade, one of the most credible stories in global finance has been the worse performance of European banks relative to American ones, both in terms of earnings and in payouts (dividends) to shareholders”. But “the situation is improving in the Old Continent”, given that, “in the last three months, (stocks of) European banks have outperformed US ones by 20% in dollar terms”.

The margin of upside would still be considerable for shares given that the securities of institutions, in Europe, “they are still traveling at values ​​70% lower than the highs tested in 2007 before the explosion of the global financial crisis, peaks that American banks instead retested in 2018”.

The article also mentions how, between 2014 and 2022, European banks have accumulated additional capital worth more than €200 billion. “Their financial position is therefore more stable today, a factor that led the regulators to give the go-ahead” to the distribution of dividends. The facts prove it: just look at the big announcements on coupons that arrived in Italy from the various big names in the sector.

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