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On Monday, Kepler Cheuvreux initiated coverage on Intesa Sanpaolo (OTC:ISNPY) SpA (ISP:IM) (OTC: ISNPY) with a Hold rating and a price target of EUR4.90. The research firm’s coverage began with the view that while Intesa Sanpaolo’s premium valuation is merited due to its high-quality earnings, the potential for stock price appreciation is limited, with more attractive opportunities available in the banking sector. According to InvestingPro data, the stock trades at a P/E ratio of 9.92 and has shown remarkable strength, gaining over 55% in the past year.
Intesa Sanpaolo has been recognized as a leading force in the restructuring of the Italian and broader European banking sectors over the past decade, achieving a dominant position in the Italian market. With a market capitalization of $93.72 billion, the bank boasts substantial market shares, ranging from 20% to 25% across all segments, and has a strategic emphasis on Wealth Management. InvestingPro analysis reveals 8 additional key insights about the company’s market position and growth potential.
The bank’s performance in 2024 has been highlighted as a record year, with expectations for continued growth in the coming years. This growth is anticipated to be driven by its fully integrated business model. Intesa Sanpaolo has set a target for its net profit to be "well above" EUR9 billion in 2025. Kepler Cheuvreux forecasts a net profit of EUR9.2 billion for the bank, a figure they consider to be readily attainable. This optimism is despite an estimated 6% decrease in Net Interest Income (NII), which is expected to be offset by robust fee generation, significantly higher trading income, and a reduction in systemic charges by approximately EUR300 million. The bank currently offers an attractive dividend yield of 4.91%, and InvestingPro data shows the stock is trading near its Fair Value.
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