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UniCredit SpA UCG

Morningstar Rating
€37.84 −0.21 (0.55%)
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Company Report

UniCredit Earnings: Impressive Fee Growth and Cost Management but Distributions Disappoint

UniCredit achieved another quarter of record results, extending its three-and-a-half-year growth streak. We commend UniCredit's structural changes in loan loss provisions that have improved loan book quality while maintaining stable margins over the last two years. With one of the industry's lowest cost/income ratios, UniCredit remains highly profitable, even with material excess capital. With net interest margin expansion clearly a thing of the past, attention will shift to other levers UniCredit can pull. We are therefore impressed by the robust fee income growth and sound cost containment evident in the second quarter. Excess capital is a nice problem to have, but there will be more demands from the market that UniCredit speeds up the deployment or return of excess capital. We have slightly raised our fair value estimate to EUR 35 from EUR 33 per share.

Price vs Fair Value

UCG is trading at a 113% premium.
Price
€38.05
Fair Value
€13.00
Uncertainty
High
1-Star Price
€71.13
5-Star Price
€77.90
Economic Moat
Bhq
Capital Allocation
Jyqkccmp

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
€37.90
Day Range
€37.5838.27
52-Week Range
€20.4439.33
Bid/Ask
€37.82 / €38.00
Market Cap
€61.00 Bil
Volume/Avg
6.1 Mil / 9.0 Mil

Key Statistics

Price/Earnings (Normalized)
6.04
Price/Sales
3.65
Dividend Yield (Trailing)
4.74%
Dividend Yield (Forward)
4.74%
Total Yield
14.54%

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)
6.046.318.35
Price/Book Value
0.970.580.62
Price/Sales
3.651.811.58
Price/Cash Flow
3.871.713.76
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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