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On Tuesday, UBS analyst Ignacio Cerezo adjusted the firm’s stance on Bankinter , S.A. (BME:BKT:SM) (OTC:BKIMF), downgrading the stock from Buy to Neutral and setting a new price target of EUR12.00, up from the previous EUR11.35. The decision follows a significant appreciation in the bank’s shares, which have risen by 50% since the beginning of the year and 155% since early 2022, before interest rate hikes began.
Bankinter’s current trading valuation stands at 10.1 times projected 2026 earnings (PE26E) and approximately 1.7 times price-to-tangible book value (PTBV), with an anticipated return on tangible equity (ROTE26E) of around 16%. Despite the bank’s robust fundamentals, which include mid-single-digit revenue growth, a cost-income (CI) ratio of around 35%, a 5% compound annual growth rate (CAGR) in earnings per share (EPS) for 2025 to 2027, and mid-teens return on tangible equity (ROTE), UBS suggests that these strengths are now adequately priced into the stock.
Cerezo’s commentary highlights Bankinter’s solid financial performance, noting its "compounder profile," which indicates the bank’s ability to consistently increase its value over time. However, the analyst believes that the current share price fully reflects the bank’s advantages, especially when compared to the sector’s average price-to-earnings ratio of about 8.5.
The upgrade in the price target to EUR12.00 from EUR11.35, despite the downgrade in rating, suggests that UBS acknowledges the bank’s positive performance and prospects but sees limited upside potential from the current levels. The bank’s stock is now trading at less than a 20% premium compared to the sector, which, according to UBS, is a fair reflection of its standing.
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