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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.
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