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On Monday, Kepler Cheuvreux analysts began coverage on BPER Banca (BPE:IM) with a Buy rating and set a price target of €8.90. The decision to initiate coverage reflects the bank’s growth trajectory and strategic mergers and acquisitions, which have significantly expanded its market position since 2018.
The analysts noted BPER Banca’s transformation from a multi-regional lender into a leading national bank in Italy. This growth has been driven by successful M&A activities, allowing the bank to double in size over the past seven years. Despite facing challenges from a declining interest rate environment, BPER Banca is expected to maintain its current profit levels through prudent financial planning.
Kepler Cheuvreux analysts highlighted that BPER Banca’s standalone business plan is credible and well-prepared to handle interest rate and volume assumptions. The potential acquisition of BP (NYSE:BP) Sondrio (BPSO) is seen as financially beneficial, contingent on full incorporation and synergy realization. Without full integration, the deal could negatively impact the bank’s return on tangible equity (ROTE) and earnings per share (EPS).
The analysts emphasized that the acquisition would be accretive to BPER Banca’s ROTE and EPS only if the full potential synergies are achieved. If the acceptance of the offer falls between 35% and 49%, the deal may become dilutive to both ROTE and EPS.
BPER Banca’s strategic growth and prudent financial management position it well in the competitive Italian banking sector, according to Kepler Cheuvreux’s analysis.
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