A banking stock that still has plenty of room to rise

During 2020, considering only capitalizations exceeding 500 million euros, among the 13 banks listed on Piazza Affari, only 4 had a positive performance. This ranking is dominated by Banco BPM, with an increase of 28%, followed by Credem with an increase of 15%. Banca Popolare Sondrio is in fourth position, but it is a banking stock that still has plenty of room for growth. Looking ahead, therefore, it could give important satisfaction to its shareholders. This is what can be deduced from the graphic analysis which we will discuss in the section dedicated to it.

Valuation according to fundamental analysis

Whichever indicator is used, the stock turns out to be overvalued. However, it maintains its appeal thanks to characteristics well highlighted in a report by Jefferies analysts, which in a report on medium-sized Italian banks that have raised the recommendation on the stock to buy with a target price of 5 euros. These are the reasons underlying the judgment

“Even if the bank trades at higher multiples than its peers, we think the large portion of floating rate loans and bonds, accounting for two-thirds and approximately 60% of the portfolio respectively, will continue to have positive impacts on revenues in the near term ”. Furthermore, “We also believe that the bank’s geographical positioning makes Popolare di Sondrio an ideal M&A target for larger competitors”.

In general, according to what is reported in specialized magazines, the analysts’ recommendations return an average target price which expresses an underestimation of approximately 20%. Also of interest is the dispersion between the various recommendations given that it remains below 7%.

A bank stock that still has a lot of room to rise: the indications of the graphic analysis

The title Banca Popolare Sondrio (MIL:BPSO) closed the session of 23 November at 3.892 euros, up 1.46% on the previous session.

The current trend is bullish and there are no obstacles along the way that leads to the most probable target in the 4.07 euro area (1st price target). The maximum bullish extension, then, could go to be placed in the 5.47 euro area (III price target) with an intermediate target in the 4.77 euro area (II price target).

Only a daily closing below 3.637 euros could undermine the bullish scenario and reverse the current trend downwards.

sondrio popular bank

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