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UniCredit SpA UCG

Morningstar Rating
€32.54 −1.91 (5.55%)
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Company Report

UniCredit Earnings: Interest Rates' Tailwind Persists; FVE Up on Improved Operating Efficiency

No-moat UniCredit delivered its most impressive performance to date, reporting a net profit of EUR 2.6 billion for the first quarter of 2024, which was 24% year-over-year growth. Despite the prevailing trend of shrinking margins, the bank maintained robust net interest income, experiencing a notable 9% increase compared with the previous year. UniCredit showed commendable cost discipline, with operating expenses remaining essentially flat over the last two years. Historically active in mergers and acquisitions, UniCredit discloses integration costs below the operating line, while we see these costs as being more recurring in nature. However, amid fluctuations in integration costs, the bank decreased its total noninterest expense by 20% when comparing the past two-year results to its 10-year average. We slightly increase our fair value estimate by 3% to EUR 33 from EUR 32 per share. We believe that UniCredit’s strategic focus on fee and commission income, coupled with its sound cost management, could shelter it from lower future interest rates.

Price vs Fair Value

UCG is trading at a 65% premium.
Price
€34.45
Fair Value
€92.00
Uncertainty
High
1-Star Price
€41.67
5-Star Price
€97.80
Economic Moat
Mwwl
Capital Allocation
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Bulls Say, Bears Say

Bulls

Low-cost retail deposits comprise the bulk of UniCredit's funding, which should support above-average profitability through the cycle.

Bears

UniCredit's credit underwriting was poor in the past.

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News

Trading Information

Previous Close Price
€34.45
Day Range
€32.1834.58
52-Week Range
€18.7437.18
Bid/Ask
€32.35 / €32.80
Market Cap
€53.56 Bil
Volume/Avg
24.6 Mil / 9.1 Mil

Key Statistics

Price/Earnings (Normalized)
5.47
Price/Sales
2.55
Dividend Yield (Trailing)
5.23%
Dividend Yield (Forward)
5.23%
Total Yield
15.01%

Company Profile

UniCredit is one of the two largest Italian retail and commercial banks, but roughly a half of its operations is outside Italy. It has a strong presence in Germany, Austria, and Central and Eastern Europe. It generates most of its revenue from retail banking, but also maintains a sizable corporate and investment bank.
Sector
Financial Services
Industry
Banks - Regional
Stock Style Box
Large Core
Total Number of Employees
78,149

Competitors

Valuation

Metric
UCG
ACA
CBK
Price/Earnings (Normalized)
5.476.117.89
Price/Book Value
0.880.560.59
Price/Sales
2.551.751.49
Price/Cash Flow
3.511.653.55
Price/Earnings
UCG
ACA
CBK

Financial Strength

Metric
UCG
ACA
CBK
Quick Ratio
Current Ratio
Interest Coverage
Quick Ratio
No chart available

Profitability

Metric
UCG
ACA
CBK
Return on Assets (Normalized)
1.20%0.31%0.50%
Return on Equity (Normalized)
15.74%8.22%9.08%
Return on Invested Capital (Normalized)
Return on Assets
UCG
ACA
CBK
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