Core Viewpoint - Bancolombia (CIB) and Banco Itau (ITUB) are both considered as potential undervalued stocks in the foreign banking sector, with a focus on their valuation metrics to determine the better investment option [1]. Valuation Metrics - CIB has a forward P/E ratio of 6.81, while ITUB has a forward P/E of 8.60, indicating that CIB may be more undervalued [5]. - The PEG ratio for CIB is 0.96, compared to ITUB's PEG ratio of 0.97, suggesting that both companies have similar expected EPS growth rates [5]. - CIB's P/B ratio is 1.26, while ITUB's P/B ratio is 1.88, further supporting the notion that CIB is the more attractive value option [6]. Earnings Outlook - Both CIB and ITUB currently hold a Zacks Rank of 2 (Buy), indicating positive earnings estimate revisions and improving earnings outlooks [3][6]. - CIB has been assigned a Value grade of B, while ITUB has a Value grade of D, highlighting CIB's superior valuation metrics [6].

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]

Core Viewpoint - The article emphasizes the importance of value investing and highlights BanColombia (CIB) as a strong value stock based on various financial metrics [2][8]. Company Overview - BanColombia (CIB) currently holds a Zacks Rank of 2 (Buy) and has a Value grade of A [4]. - The stock is trading with a P/E ratio of 6.63, significantly lower than its industry's average of 9.46 [4]. - CIB's Forward P/E has fluctuated between 5.05 and 7.19 over the past year, with a median of 5.51 [4]. Valuation Metrics - CIB has a P/B ratio of 1.22, which is favorable compared to the industry's average P/B of 2.28 [5]. - The P/S ratio for CIB is 0.98, while the industry's average P/S is 1.55, indicating a potential undervaluation [6]. - CIB's P/CF ratio stands at 7.71, compared to the industry's average of 16.13, suggesting strong cash flow relative to its market value [7]. Investment Potential - The various valuation metrics indicate that BanColombia is likely undervalued at present, making it an attractive option for value investors [8].

Financial Data and Key Metrics Changes - The quarterly net income reached COP 1.7 trillion, reflecting a 4.5% growth both quarterly and annually [6][28] - The return on equity (ROE) for the quarter was 16.3%, with a return on tangible equity of 20.4% [29] - The loan portfolio decreased slightly this quarter but grew 7% annually [6][20] - Deposits fell by 1% in the quarter yet increased almost 13% annually [7][21] - The cost of risk for the period was 1.6%, showing improved asset quality [7][26] 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 [17] - Credit card loans market share increased by 20 basis points, representing nearly 30% of transaction value [17] Market Data and Key Metrics Changes - The Colombian economy showed signs of recovery with increased investment and domestic demand despite global trade tensions [5] - Inflation rates remained stable, leading to unchanged interest rates [5] - 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 is transitioning to Grupo Cypest, allowing for more value distribution, including an extraordinary dividend [8] - A share buyback program is planned for approval at an upcoming extraordinary shareholders meeting [9] Management's Comments on Operating Environment and Future Outlook - Management expects GDP growth of 2.6% for 2025, with a slight increase to 3% in 2026 [11] - The fiscal situation in Colombia is a significant challenge, with a projected fiscal deficit of 5.9% of GDP [54] - The company remains cautious regarding the cost of risk due to macroeconomic uncertainties [70] Other Important Information - The company plans to release consolidated results for the second quarter on August 6, including a new accounting structure [9] - The efficiency ratio fell to 49.6%, indicating improved operational efficiency [28] Q&A Session Summary Question: Regarding personal expenses tracking above inflation - Management explained that the increase in personal expenses is due to higher provisions for bonuses compared to the previous year, which were lower due to lower net income expectations [40][41] Question: On margin optimization and funding costs - Management acknowledged the competitive environment for funding but expressed confidence in maintaining margins through effective cost management strategies [36][37] Question: Thoughts on political and economic outlook in Colombia - Management indicated that the fiscal situation is a significant challenge and emphasized the need for the new government to address it [52][54] Question: ROE targets for subsidiaries - Management provided ROE targets, expecting Banco Agricola in El Salvador to exceed 20%, Banismo in Panama to exceed 10%, and BAM to reach around 14-15% [58][59] Question: Impact of lower oil prices on GDP and fiscal forecasts - Management maintained the GDP growth forecast of 2.6% but acknowledged that lower oil prices could impact fiscal revenues and expenditures [68] Question: Guidance on provisions and growth expectations - Management confirmed that provisions are expected to remain prudent despite positive asset quality trends, with specific growth rates projected for different loan segments [82]