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On Thursday, Deutsche Bank (ETR:DBKGn)’s analysts increased their price target on Banco BPM SpA (BAMI:IM) (OTC: BNCZF) shares to EUR10.60, up from EUR10.00, while maintaining a Buy rating on the stock. The reassessment follows Banco BPM’s robust first-quarter performance in 2025, which surpassed analyst expectations. The bank’s strong momentum is reflected in its impressive 61.58% return over the past year, with the stock currently trading near its 52-week high of $10.35.
Giovanni Razzoli of Deutsche Bank noted that Banco BPM’s first-quarter results led to an upward revision of their full-year 2025 net income forecast, from EUR 1.7 billion to EUR 1.95 billion. This adjustment is underpinned by positive operating trends observed in the bank, including an increase in investment fees, a resilient net interest income (NII) buoyed by managerial initiatives, and a surge in loan origination. According to InvestingPro data, the bank has demonstrated strong fundamental growth with revenue increasing by 18.94% in the last twelve months.
The bank’s recent acquisition of Anima has notably enhanced Banco BPM’s earnings profile. According to Razzoli, about 40% of the profits in the first quarter of 2025 came from product companies, which typically trade at higher multiples. Despite this shift towards higher-earning segments, Banco BPM’s price-to-earnings (P/E) ratio is still hovering around 7 times the 2026 estimates, suggesting that the stock is undervalued. InvestingPro analysis supports this view, with its Fair Value calculation indicating the stock remains undervalued, while also highlighting the bank’s consistent dividend growth over the past four years.
Razzoli further elaborated that if one were to exclude the valuation of the product companies from the equation, Banco BPM’s core franchise alone is valued at a P/E of approximately 2 times. This P/E ratio is a financial metric used to evaluate a company’s relative valuation, with a lower number potentially indicating an undervalued stock in comparison to its earnings.
Banco BPM has not issued any comments regarding the new price target or the analyst’s remarks. The market’s reaction to this updated guidance and price target adjustment will be observed in the upcoming trading sessions on the relevant stock exchanges.
In other recent news, UBS has adjusted its rating for Banco BPM SpA, downgrading the stock from Buy to Neutral. Despite this downgrade, the price target has been raised from €9.40 to €10.00. This adjustment reflects UBS’s view that the stock’s current premium pricing limits further growth potential, even with anticipated improvements in fee progression and cost of risk. Analysts from UBS have slightly increased earnings estimates for 2025-2029 by 2-3%, though they remain cautious about the bank’s revenue growth and potential risks. The earnings forecasts for 2026-2027, excluding potential contributions from Anima, are still 6-9% below Banco BPM’s own target plans. UBS’s outlook includes expectations of modest revenue growth and possible increased provisions due to higher costs and other risks. The pending approval of the Danish Compromise is also a factor that could impact Banco BPM’s future performance. These developments highlight UBS’s prudent stance on Banco BPM’s valuation and growth prospects.
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