The impact of the war between Russia and Ukraine on the Unicredit stock was devastating. In two weeks, starting from February 24, in fact, the prices have lost about 50%. However, after the stock reached the target of a bearish projection in the 8 euro area, we witnessed a strong bullish acceleration that is still underway. A weekly rise like the one seen at the end of May 13 has not been seen on Unicredit since November 2020. The prices, in fact, have brought home an increase of about 18%. The consequence of this bullish exploit is that after this week the Unicredit stock could return to the levels prior to the Russia-Ukraine conflict.
But what are the causes behind this strong increase in Unicredit?
The bank provided detailed disclosure on Russia risk, good operating trends and also announced the start of the buyback. On the first point, in particular, the hypothesis of the sale of the Russian subsidiary Unicredit Bank, which in Russia holds just over 1% of the market in Russia, has circulated. That was enough to trigger an increase of over 10%.
Before moving on to the graphical analysis, a brief discussion on what is the evaluation of the title. Let’s start by saying that, as written in previous reports, Unicredit is strongly underestimated if we consider the indicators based on market multiples. Additionally, the company’s price relative to its net book value makes the stock appear relatively cheap.
The prospects for the dividend yield are also interesting. According to what is reported in specialized magazines, in fact, it could be around 7%. Furthermore, the average opinion of the analysts is rack up with a target price that expresses an undervaluation of over 40%.
After this week, the Unicredit title could return to the levels prior to the Russia-Ukraine conflict: the indications of the graphic analysis
The title Unicredit (MIL: UCG) closed the session on May 13 up by 0.52% compared to the previous session at € 9.696.
Weekly time frame
The current trend is bullish, but next week could be decisive for understanding the future of the title. As can be seen from the graph, in fact, the prices have reached levels that in the past have already slowed the bullish push. A strong bullish signal would occur in the case of a weekly close above 10.443 euros. In this case, the doors could be opened for the achievement of the II price target in the 13.018 euro area. Finally, the maximum bullish extension could go to the 15.6 euro area.
A bad bearish signal, on the other hand, would occur if we were to witness a weekly close of less than € 8.852. In this case, Unicredit shares could update the annual minimums.
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