Intesa Sanpaolo: Low-Risk Visibility And Attractive Return

Core Viewpoint - Intesa Sanpaolo is expected to continue its stock price appreciation due to its strong market position, diversified revenue streams, and solid capital return policy [1][3]. Financial Performance - In H1, Intesa Sanpaolo reported a net profit of €4.77 billion, with Q2 results of €2.47 billion, surpassing analysts' estimates of €2.3 billion [2]. - The bank's net operating income increased by 9.6% to €13.6 billion, with net interest income of €7.9 billion and net commissions of €4.6 billion [2]. - The cost/income ratio improved to 38.3%, with expenses reduced to €5.2 billion [2]. - Impaired loans reached a minimum of 1.1% of total loans, with a CET1 ratio of 13.5% [2]. Capital Return and Future Outlook - The bank confirmed a higher dividend per share (DPS) for 2024 and 2025, with a net income outlook above €8.5 billion in the next two years [3]. - Intesa Sanpaolo identified €100 billion in client financial assets to expand its asset management business, supported by a network of over 16,000 advisors [3]. - The company plans an annual buyback of €1.5 billion in 2025 and 2026, translating to a yield of 11-12% [3]. Valuation and Earnings Projections - The forecast for 2024 includes €27 billion in sales and a net income of €8.45 billion, with 2025 earnings projected at €8.65 billion and EPS of €0.50 [5]. - The target price is set at €3.75 per share, based on a blended methodology of 7x P/E and a 15% 2025 RoTE estimate [5].