Core Viewpoint - The comparison between Intesa Sanpaolo SpA (ISNPY) and HDFC Bank (HDB) indicates that ISNPY presents a better value opportunity for investors at this time [1]. Valuation Metrics - Intesa Sanpaolo SpA has a Zacks Rank of 2 (Buy), while HDFC Bank has a Zacks Rank of 4 (Sell), suggesting a more favorable earnings outlook for ISNPY [3]. - The forward P/E ratio for ISNPY is 7.82, significantly lower than HDB's forward P/E of 20.97, indicating that ISNPY may be undervalued [5]. - ISNPY has a PEG ratio of 0.88, while HDB's PEG ratio is 1.66, further supporting the notion that ISNPY is a more attractive investment based on expected earnings growth [5]. - The P/B ratio for ISNPY is 1, compared to HDB's P/B of 2.59, reinforcing ISNPY's superior valuation metrics [6]. - Overall, ISNPY holds a Value grade of B, while HDB has a Value grade of C, highlighting ISNPY's stronger position in terms of value [6].

Core Viewpoint - Intesa Sanpaolo continues to achieve record financial results, outperforming European financial peers with a return of approximately 28% since January, compared to around 7% for the peer group [1][3]. Financial Performance - The first half of 2024 saw Intesa Sanpaolo report a return on tangible equity (ROTE) exceeding 20%, although this may represent a peak due to falling Eurozone interest rates [2]. - The bank's shares have appreciated over 20% since the last coverage, with the tangible book value per share (TBVPS) multiple increasing from around 1x to 1.3x [3]. - Net interest income (NII) grew by 2% sequentially to just over €4 billion in the last quarter, supported by a €160 billion structural hedge [6]. Market Position - Intesa Sanpaolo is the largest bank in Italy, holding market-leading shares in loans (approximately 18%), deposits (around 22%), and asset management (about 23%) [4]. - The bank's significant non-interest income generation accounts for over 40% of total revenue, with net fee and commission income increasing by 5% sequentially to €2.38 billion [8][9]. Cost Management - Operating expenses were reported at €2.65 billion, down approximately 1.5% year-over-year, contributing to a cost/income ratio below 40%, one of the best in its peer group [9][10]. - Loan loss charges were around 30 basis points in Q2, aligning with the medium-term target of 30-40 basis points, indicating stable asset quality with gross non-performing loans around 2% [10]. Valuation and Future Outlook - Shares are currently trading at €3.34 in Milan, with a target price of €3.90 (~$25.55 per ADS) in three years, suggesting a pre-tax total return of around €4.90 ($32.10 per ADS) inclusive of dividends [11][12]. - Management's capital returns policy is heavily dividend-focused, with approximately 70% of net income allocated to dividends and a €1.7 billion buyback initiated in June [11].

Core Viewpoint - Intesa Sanpaolo SpA (ISNPY) is currently viewed as a superior value option compared to United Overseas Bank Ltd. (UOVEY) based on various valuation metrics [7] Group 1: Company Overview - Both Intesa Sanpaolo SpA and United Overseas Bank Ltd. are recognized as potential undervalued stocks for investors [1] - Both companies currently hold a Zacks Rank of 2 (Buy), indicating a positive earnings outlook due to favorable analyst estimate revisions [3] Group 2: Valuation Metrics - ISNPY has a forward P/E ratio of 8.01, while UOVEY has a forward P/E of 9.46, suggesting ISNPY is more attractively priced [5] - The PEG ratio for ISNPY is 0.90, indicating a better valuation relative to its expected earnings growth compared to UOVEY's PEG ratio of 8.30 [5] - ISNPY's P/B ratio is 1.02, compared to UOVEY's P/B of 1.18, further supporting ISNPY's stronger valuation metrics [6] - ISNPY has a Value grade of B, while UOVEY has a Value grade of D, highlighting ISNPY's superior valuation profile [6]

Financial Data and Key Metrics - Net income for H1 2024 reached €4.8 billion, with Q2 contributing €2.5 billion, marking the best performance in 17 years [4] - EPS grew 15% year-on-year, with total shareholder distribution exceeding €7.4 billion, including a €3 billion interim dividend and a buyback program [6] - Common equity ratio increased to approximately 13.5%, and NPL stock was further reduced [6] - Net interest income grew 2% quarterly and 12% yearly in Q2, with commissions increasing 5% quarterly [12] - Operating margin increased by 15% year-on-year, and net income grew 70% yearly excluding capital gains from the previous year [13] Business Line Performance - Wealth Management and Protection contributed 44% of gross income in H1 2024, with double-digit growth in commissions from management and consulting activities [14] - Commissions and insurance income accounted for over 40% of revenues, the highest in Europe after UBS [15] - Advisory services supported by digital tools saw commissions increase over 40% year-on-year [16] - Property and casualty insurance was driven by non-motor business, with significant upside potential due to low penetration rates [21] Market Performance - Customer financial assets increased by €100 billion year-on-year and €20 billion in Q2, with positive net inflows in asset under management reversing previous trends [20] - Gross NPL stock decreased by €800 million year-on-year and €400 million in Q2, with NPL inflows at historical lows [24] - NPL ratio stood at 1%, among the best in Europe [25] Strategy and Industry Competition - The company is leveraging its fully-owned product factories and a single oversight unit to strengthen its Wealth Management, Protection, and Advisory leadership [22] - Significant investments in technology (€3.2 billion) have positioned the company as a leader in social impact and efficiency [7] - The company expects to benefit from a potential reduction in Euribor, with net interest income projected to reach €15.5 billion in 2024 [13][36] Management Commentary on Operating Environment and Outlook - Management highlighted the strong Italian economy, with GDP growth expected between 0.7% and 1% in 2024 [29] - The company increased its net income guidance to above €8.5 billion for 2024 and 2025, driven by strong performance and sustainable profitability [31] - Management emphasized the importance of maintaining a conservative approach to asset quality and cost of risk, targeting 30-40 basis points [69] Other Key Information - The company deployed €500 million of a €1.5 billion program to address social needs and promote inclusion [8] - Public sector tax revenues increased by €500 million year-on-year, with 40% of cash dividends going directly to households and foundations [18] - The cost/income ratio reached a record low of 38%, the best in Europe [23] Q&A Session Summary Question: Key drivers of net profit guidance for 2024 [34] - Management explained that net interest income is the primary driver, with expectations of €15.5 billion in 2024, supported by hedging facilities [36][37] - The company plans to maintain buffers for future profitability, including potential integration charges and NPL disposals [35] Question: Capital return and buyback plans [43] - Management indicated a positive attitude toward capital return, with potential for additional buybacks in 2024, subject to board approval [45][46] Question: Net interest income outlook for 2025 [49] - Management projected a positive contribution from hedging facilities, with net interest income expected to remain strong even if Euribor declines [50][52] Question: Cost of risk sustainability in the Italian banking sector [61] - Management emphasized a conservative approach, targeting a cost of risk between 30-40 basis points, which they consider sustainable given the low NPL inflows [69][70] Question: Cost/income ratio improvement potential [77] - Management expects the cost/income ratio to stabilize between 40%-45%, driven by technology investments and operational efficiencies [78] Question: Insurance income trends and Wealth Management strategy [80] - Management highlighted seasonality in insurance income and plans to accelerate Wealth Management growth, particularly with the conversion of deposits into asset management products [81][86] Question: Trading income and consolidation in the Italian banking sector [89] - Management downplayed the significance of trading income, focusing instead on core revenues [89] - They expressed skepticism about consolidation in the Italian banking sector, citing limited value creation opportunities [92]

Core Insights - The article compares two foreign bank stocks, Intesa Sanpaolo SpA (ISNPY) and Toronto-Dominion Bank (TD), to determine which is more attractive to value investors [2][5] Valuation Metrics - ISNPY has a Value grade of B, while TD has a Value grade of F, indicating ISNPY is viewed more favorably by value investors [4] - ISNPY's P/B ratio is 0.96, compared to TD's P/B ratio of 1.32, suggesting ISNPY is undervalued relative to its book value [6] - The forward P/E ratio for ISNPY is 7.57, while TD's forward P/E is 9.53, indicating ISNPY may offer better value [8] - ISNPY has a PEG ratio of 0.95, whereas TD's PEG ratio is 1.54, further supporting ISNPY's attractiveness based on expected earnings growth [8] Earnings Outlook - ISNPY has a Zacks Rank of 2 (Buy), indicating a stronger earnings outlook compared to TD, which has a Zacks Rank of 3 (Hold) [5] - The article suggests that ISNPY has experienced stronger estimate revision activity, making it a more appealing option for value investors [9]

Core Insights - The article compares two bank stocks, Intesa Sanpaolo SpA (ISNPY) and Canadian Imperial Bank (CM), to determine which offers better value for investors [1] Valuation Metrics - Intesa Sanpaolo SpA has a Zacks Rank of 2 (Buy), indicating a more favorable earnings estimate revision trend compared to Canadian Imperial Bank, which has a Zacks Rank of 3 (Hold) [3] - ISNPY's forward P/E ratio is 7.23, significantly lower than CM's forward P/E of 9.51, suggesting ISNPY may be undervalued [5] - The PEG ratio for ISNPY is 0.91, while CM's PEG ratio is 1.89, indicating ISNPY has a better valuation relative to its expected earnings growth [5] - ISNPY's P/B ratio is 0.92, compared to CM's P/B of 1.22, further supporting the notion that ISNPY is undervalued [6] Value Grades - ISNPY has a Value grade of B, while CM has a Value grade of C, reinforcing the conclusion that ISNPY is the more attractive option for value investors [7]

Core Viewpoint - Intesa Sanpaolo SpA (ISNPY) has experienced a bearish trend recently, losing 6.7% over the past four weeks, but a hammer chart pattern suggests a potential trend reversal due to increased buying interest and optimism among analysts [1][2]. Group 1: Technical Analysis - The formation of a hammer chart pattern indicates that the stock may be nearing a bottom, suggesting potential exhaustion of selling pressure [1]. - A hammer pattern occurs when a stock opens lower, makes a new low, but then closes near or above its opening price, signaling that bears may have lost control [4]. - Hammer candles can appear on various timeframes and are used by both short-term and long-term investors, but should be combined with other bullish indicators for confirmation [4]. Group 2: Fundamental Analysis - There has been a positive trend in earnings estimate revisions for ISNPY, with a 0.7% increase in the consensus EPS estimate over the last 30 days, indicating analysts expect better earnings [2]. - ISNPY currently holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks, which typically outperform the market [2]. - The Zacks Rank serves as a timing indicator, suggesting that the company's prospects are improving, further supporting the potential for a turnaround [2].

Financial Data and Key Metrics Changes - The company reported a net income of €2.5 billion for Q1 2024, marking the best quarterly net income since 2007, with an 18% year-on-year increase in net income [22][28][31] - Earnings per share grew by 21% year-on-year, and the cost-income ratio reached its lowest ever at 38% [29][32] - Customer financial assets increased by €120 billion year-on-year, reaching over €1.3 trillion, with significant growth in both assets under management and assets under administration [20][41] Business Line Data and Key Metrics Changes - Commissions related to management, dealing, and consultancy activities increased by double digits, contributing over 40% to revenues, the highest in Europe after UBS [42][52] - Administrative costs decreased by over 3% year-on-year, while operating costs were down 3% when excluding depreciation for tech investments [54][32] - The wealth management and protection businesses contributed 45% of gross income in Q1 [41] Market Data and Key Metrics Changes - The company experienced a reduction in deposits, attributed to a technical movement of €5 billion related to client tax payments [9] - The net interest income was up over 20% year-on-year, with a stable quarterly performance when adjusted for the number of days [38][40] - NPL inflows remained at historical lows, with a net NPL of €5 billion and an NPL ratio of 1% [55][43] Company Strategy and Development Direction - The company aims to focus on wealth management, protection, advisory, and technological leadership, with significant investments planned in these areas [23][15] - A fees and commissions steering committee has been established to enhance commission growth across all divisions [35][68] - The company is positioned to leverage its fully owned product factories for quick market responses and product customization [31][34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving net income above €8 billion for both 2024 and 2025, supported by strong performance in wealth management and advisory services [50][36] - The outlook remains conservative, with expectations of a slight increase in the cost of risk but overall strong credit quality [96][110] - The company is monitoring the impact of BTP placements on client deposits but remains optimistic about its ability to generate significant fee income [84][147] Other Important Information - The company plans to return at least €7.3 billion to shareholders in 2024, including a €1.7 billion buyback [29][51] - The liquidity coverage ratio was over 140%, indicating a strong liquidity position [45] - The company has committed €1.5 billion to address social needs and promote inclusion, with €400 million already deployed [47][48] Q&A Session Summary Question: What are the main actions of the fee and commission steering committee? - The committee is focused on increasing commissions across all divisions, with a strong emphasis on wealth management and protection services [68][100] Question: How do you see the trends in net interest income and deposit costs? - The expectation is for a modest increase in deposit costs, with net interest income remaining strong due to core hedging strategies [90][92] Question: What is the outlook for asset quality and cost of risk? - The company anticipates a stable cost of risk, with no significant deterioration in asset quality expected [96][110] Question: How will the company manage the potential outflows to BTP Valori? - The company plans to actively engage clients to manage their portfolios and mitigate outflows, leveraging its strong position in wealth management [84][147] Question: What is the expected contribution from fee and commissions for 2024? - The company expects double-digit growth in fees and commissions, particularly from wealth management and insurance products [100][119]

tupungato Introduction Earnings season is upon us; as usual, it opened up with the major big banks. JPMorgan Chase & Co. (JPM) beat estimates, yet its shares fell 6.5%. The issue was the softer than expected guidance. Intesa Sanpaolo S.p.A. (OTCPK:ISNPY, IITSF) continues to impress, and it is becoming more and more followed on Seeking Alpha since it secured a spot as one of the best 2024 picks in the market and the number one pick among financial stocks. JPMorgan includes Intesa among its top European p ...

A strong bank for a sustainable world 2023 Results Excellent performance with Balance sheet further strengthened in Q4 Well-diversified business model, ready to leverage on our leadership in Wealth Management, Protection & Advisory JTFS4 loon S February 6, 2024 MIL-BVA362-03032014-90141/VR Best-ever year with €7.7bn Net income 1 €7.7bn FY23 Net income (+76% vs FY22(1)), the best year ever (€7.9bn when excluding the final Resolution Fund contribution) €1.6bn Net income in Q4 (+49% vs 4Q22(1)), the best Q4 ev ...