Core Viewpoint - Investors in the Banks - Foreign sector should consider Bancolombia (CIB) and Nordea Bank AB (NRDBY) as potential value opportunities, with CIB currently presenting a superior value option based on valuation metrics [1][7]. Valuation Metrics - Both Bancolombia and Nordea Bank AB have a Zacks Rank of 1 (Strong Buy), indicating positive earnings estimate revisions and improving earnings outlooks [3]. - CIB has a forward P/E ratio of 6.98, while NRDBY has a forward P/E of 9.27, suggesting that CIB is more attractively priced [5]. - CIB's PEG ratio is 0.98, indicating a favorable valuation relative to its expected earnings growth, whereas NRDBY's PEG ratio is significantly higher at 5.65 [5]. - CIB's P/B ratio is 1.29, compared to NRDBY's P/B of 1.64, further supporting CIB's stronger valuation metrics [6]. - CIB has a Value grade of B, while NRDBY has a Value grade of D, highlighting the relative undervaluation of CIB [6].

Core Viewpoint - Bancolombia (CIB) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook driven by rising earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Performance - The Zacks rating system emphasizes the importance of earnings estimate revisions, which are strongly correlated with near-term stock price movements [4][6]. - Bancolombia's earnings estimate for the fiscal year ending December 2025 is projected at $6.47 per share, remaining unchanged from the previous year, while the Zacks Consensus Estimate has increased by 6% over the past three months [8]. Institutional Investor Influence - Institutional investors utilize earnings estimates to determine the fair value of stocks, leading to buying or selling actions that affect stock prices [4]. Zacks Rank System - The Zacks Rank system categorizes stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - Bancolombia's upgrade places it in the top 5% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].

Group 1: BanColombia (CIB) - BanColombia is the largest bank in terms of assets and has the largest market participation in deposit products and loans [1] - The Zacks Consensus Estimate for its current year earnings has increased by 4% over the last 60 days [1] - The company has a dividend yield of 12.4%, significantly higher than the industry average of 3.3% [1] Group 2: Intercorp Financial Services (IFS) - Intercorp Financial Services provides financial products and services [2] - The Zacks Consensus Estimate for its current year earnings has increased by 2.6% over the last 60 days [2] - The company has a dividend yield of 2.5%, compared to the industry average of 0.0% [2] Group 3: Seven and I Holdings Co. (SVNDY) - Seven and I Holdings is a Japan-based holding company focusing on seven business areas including convenience stores and financial services [3] - The Zacks Consensus Estimate for its current year earnings has increased by 18.5% over the last 60 days [3] - The company has a dividend yield of 1.2%, compared to the industry average of 0.0% [3]

Group 1 - Grupo Cibest (CIB) shares increased by 5.5% to close at $44.97, with trading volume significantly higher than usual, compared to a 2.5% gain over the past four weeks [1][2] - The rise in CIB's share price is attributed to reduced geopolitical tensions in the Middle East following President Trump's intervention, which has boosted investor confidence in global stock markets [2] - CIB is expected to report quarterly earnings of $1.63 per share, reflecting a year-over-year increase of 13.2%, with revenues projected at $1.83 billion, up 3% from the previous year [3] Group 2 - The consensus EPS estimate for CIB has remained unchanged over the last 30 days, indicating that stock price movements may not sustain without trends in earnings estimate revisions [4] - CIB currently holds a Zacks Rank of 3 (Hold), indicating a neutral outlook [5] - KBC Group, a peer in the same industry, has a consensus EPS estimate of $1.34, representing a year-over-year change of 10.7%, and also holds a Zacks Rank of 3 (Hold) [6]

Group 1 - Bancolombia has rebranded itself as "Grupo Cibest" and is a bank holding company based in Colombia [1] - The company is the direct owner of several banks, including Bancolombia (the largest bank in Colombia), Bancoagricola (the largest bank in El Salvador), Banistmo (the second-largest bank in Panama), and BAM [1]

Core Viewpoint - Bancolombia (CIB) has been upgraded to a Zacks Rank 2 (Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system emphasizes the importance of changing earnings estimates in determining stock price movements, with a strong correlation between earnings estimate revisions and near-term stock performance [4][6]. - Rising earnings estimates for Bancolombia indicate an improvement in the company's underlying business, suggesting that investors may respond positively by driving the stock price higher [5][10]. Zacks Rating System - The Zacks Rank stock-rating system categorizes stocks into five groups based on earnings estimates, with a proven track record of Zacks Rank 1 stocks generating an average annual return of +25% since 1988 [7]. - The upgrade of Bancolombia to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [9][10]. Earnings Estimate Revisions for Bancolombia - For the fiscal year ending December 2025, Bancolombia is expected to earn $6.30 per share, which remains unchanged from the previous year, while the Zacks Consensus Estimate has increased by 1.4% over the past three months [8].

Core Viewpoint - Investors in the Banks - Foreign sector should consider Bancolombia (CIB) and Banco Itau (ITUB) for potential undervalued stock opportunities [1] Group 1: Zacks Rank and Earnings Outlook - Bancolombia has a Zacks Rank of 2 (Buy), indicating a positive earnings outlook, while Banco Itau has a Zacks Rank of 3 (Hold) [3] - The Zacks Rank emphasizes companies with positive earnings estimate revisions, suggesting that CIB is likely experiencing a more favorable earnings outlook [3] Group 2: Valuation Metrics - CIB has a forward P/E ratio of 6.55, significantly lower than ITUB's forward P/E of 9.53, indicating that CIB may be undervalued [5] - CIB's PEG ratio is 0.92, while ITUB's PEG ratio is 1.17, suggesting that CIB's stock is expected to grow at a better rate relative to its price [5] - CIB's P/B ratio is 1.19 compared to ITUB's P/B of 1.99, further supporting the notion that CIB is undervalued [6] Group 3: Value Grades - CIB has earned a Value grade of A, while ITUB has a Value grade of D, indicating a stronger valuation profile for CIB [6] - The combination of Zacks Rank and Style Scores suggests that value investors may prefer CIB over ITUB at this time [6]

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value ...

Bancolombia (CIB) Q1 2025 Earnings Call May 06, 2025 09:00 AM ET Company Participants Juan Carlos Mora Uribe - President & CEOLaura Clavijo - Chief EconomistMauricio Botero Wolff - VP - Finance & CFOYuri Fernandes - Executive DirectorErnesto Gabilondo - Director - LatAm Financials Bank of AmericaAndres Soto - Executive Director - LatAm Equity ResearchBrian Flores - VP - Equity ResearchTito Labarta - Vice PresidentCarlos Gomez-Lopez - Head of LatAm Financial InstitutionsNicolas Riva - Director Conference Cal ...

Financial Data and Key Metrics Changes - The quarterly net income reached COP 1.7 trillion, reflecting a 4.5% growth both quarterly and annually [5][29] - The return on equity (ROE) for the quarter was 16.3%, with a return on tangible equity of 20.4% [30] - The loan portfolio decreased slightly this quarter but grew 7% annually [5][21] - Deposits fell by 1% in the quarter yet increased almost 13% annually [6][22] - The cost of risk for the period was 1.6%, showing improved asset quality [6][27] Business Line Data and Key Metrics Changes - The retail segment saw an increase in market share in savings accounts and time deposits by 110 basis points as of February 2025 [16] - NEKI's deposits experienced a significant growth of 70% year over year [18] - Credit card loans market share increased by 20 basis points, representing nearly 30% of transaction value [18] Market Data and Key Metrics Changes - The Colombian economy showed signs of recovery with increased investment and domestic demand despite global trade tensions [4] - Inflation rates remained stable, leading to unchanged interest rates during the quarter [4] - The exchange rate depreciated up to 8% during March, impacting local assets [12] Company Strategy and Development Direction - The merger of Bancolombia ALA MANO with NEKI aims to enhance financial inclusion and meet evolving technological needs [14] - The company plans to distribute an extraordinary dividend of $6.24 per share, resulting in a total dividend payout of 69% for the year [7] - A share buyback program is planned for approval at an upcoming extraordinary shareholders meeting [8] Management's Comments on Operating Environment and Future Outlook - Management maintains a GDP growth expectation of 2.6% for 2025, with a slight increase to 3% in 2026 [11] - The fiscal situation in Colombia is viewed as a significant challenge, with a projected fiscal deficit of 5.9% of GDP [51][53] - The company remains cautious regarding the cost of risk due to macroeconomic uncertainties [69] Other Important Information - The company achieved a total solvency ratio of nearly 13% and a core equity Tier one ratio of 11.2% [7][30] - The transition to the Mibanco Columbia App has enhanced customer experience, with 8.5 million users migrated [8] Q&A Session Summary Question: Regarding personal expenses and bonus line tracking above inflation - Management explained that the first quarter's higher provisions for bonuses were due to improved net income expectations compared to the previous year [39] Question: On margins and funding optimization - Management acknowledged the competitive environment for funding but expressed confidence in maintaining net interest margin (NIM) guidance of around 6.2% [37][38] Question: Political and economic outlook in Colombia - Management indicated that the fiscal situation is a key challenge, with expectations for a clearer political landscape by the end of the year [50][51] Question: ROE targets among subsidiaries - Management provided ROE targets of above 20% for Banco Agricola in El Salvador, above 10% for Banismo in Panama, and around 14-15% for BAM in Guatemala [57][59] Question: Impact of lower oil prices on GDP and fiscal forecast - Management maintained the GDP growth expectation of 2.6% but acknowledged potential revisions due to lower oil prices impacting fiscal revenues [66] Question: Provisions and growth relationship - Management confirmed guidance for commercial loans growing at 4%, mortgage loans at 4.5%, and consumer loans at 8% [83]