BofA Securities downgrades Intesa-Sanpaolo stock on valuation concerns

Published 24/06/2025, 08:42
BofA Securities downgrades Intesa-Sanpaolo stock on valuation concerns

Investing.com - BofA Securities downgraded Intesa-Sanpaolo SpA (BIT:ISP) (OTC:ISNPY) stock rating from Buy to Neutral on Tuesday, while raising its price target to EUR5.50 from EUR5.00.

The Italian banking giant received the downgrade despite BofA’s upward revision of earnings per share estimates following first-quarter results. The research firm cited valuation concerns as the primary reason for the rating change, noting the stock currently trades at 1.8 times tangible book value for an expected return on tangible equity of approximately 21% in 2027.

BofA incorporated updated Euribor projections into its model, increasing EPS estimates by approximately 5% to reflect an expected exit rate of around 1.75% by year-end, broadly in line with the Euribor forward curve. The firm still forecasts net interest income to grow by approximately 2% year-over-year in 2026-2027.

The research firm expects Intesa-Sanpaolo to maintain resilient deposit remuneration and anticipates a EUR0.5-0.6 billion contribution from the replicating portfolio. BofA’s earnings estimates for 2026-2027 now stand approximately 5% ahead of consensus.

BofA also projects another EUR2.3 billion "special" buyback in 2025 on top of Intesa-Sanpaolo’s 70% ordinary dividend payout, with EUR2 billion of share repurchases currently ongoing.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2025 - Fusion Media Limited. All Rights Reserved.