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Intesa Sanpaolo: positive analysts await business plan

Shares of Intesa Sanpaolo - an overview of positions and prospects Dwain Ross ★★★★★

Intesa Sanpaolo shares continue to gain momentum with the presentation of the business plan for 2022-2025 scheduled for next Friday, February 4, and thanks to the opinions of analysts. Since the beginning of the year, shares of the main Italian bank have risen by 15% (+45% y/y) and are now moving above pre-covid levels and not far from 5-year highs.

Understanding, hypotheses about the new industrial plan

To help boost the stock, a series of positive opinions, including Morgan Stanley, which raised its target price for the stock to 3.3 euros with an overweight rating, placing it among the new European Top Picks. Investment bank analysts say Intesa Sanpaolo is well positioned to boost margins with Life's growth in the bancassurance sector, lower costs and a 35 basis point cost of credit that could push 2024/2025 return on fixed capital to 11%, while returning to shareholders about 50% of its capitalization, including buyback.
Intesa has never been so well capitalized" and also "so clean" with NPLs, "dropped to record levels," analysts at the investment bank wrote. And this is "until it finds itself for the first time with a market share of more than 20%, equal to twice its competitors."

As CEO Carlo Messina has been anticipating in recent months, Ca' de Sass will look to reduce risk, increase money management and a generous dividend policy.

“We expect it to be focused on operational improvement, profitability and a generous dividend policy (in line with previous plans),” with the possibility of extraordinary capital return initiatives,” wrote Societé Generale analysts, who believe the management’s “external growth” capital may be on the radar. For this reason, the Hold Rating is maintained as the target price rises from EUR 2.6 to EUR 2.65.

Intesa Sanpaolo: what analysts think

Barclays, in a report on Italian banks, also highlights that Intesa Sanpaolo is its preferred choice in the sector and that the presentation of the business plan could benefit the stock: for this reason, it has an overweight rating and a target price of 3.1 euros.

For Deutsche Bank, which evaluates buy shares, it could rise to 2.90 euros. More optimistic are experts from BNP Paribas, who expect growth to 3 euros (outperform). The buy rating comes from HSBC with a target price of €3.20. According to experts from the English bank, Intesa Sanpaolo will pay a total cash dividend of 14.7 billion euros in the period 2021-2024, which is equal to 31% of its market capitalization.

Analysts at Equita SIM are also bullish with a buy recommendation and a price target of €2.9. Milanese SIM recalls that the management of the bank has already indicated that the fourth quarter of 2021 will be affected by management actions to support the new business plan. The shares are trading at 9.4 times their price-to-earnings ratio in 2022 and 0.9 times their price-to-equity ratio, with a dividend yield of over 7%.


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