In the Italian banking sector, there is a stock that has performed better than the others in the last year. We are talking about Credem which, with an increase of about 10%, ranks first in the ranking of the best banks listed on the Milan Stock Exchange. In second and third place are the other two only stocks that have had a positive performance: Banca Ifis and Unicredit.
Credem’s strength is evident if you look at the evaluations reported in specialized magazines. Whatever the indicator used, in fact, the stock is undervalued. For example, with a P / E ratio of 8.98 for the current fiscal year and 8.23 for the 2023 fiscal year, the stock’s valuation levels are very low in terms of earnings multiples. It is interesting to note that the Credem stock is also among the most undervalued at a European level. Suffice it to say that only 10% of European banks have a price / earnings ratio lower than that of Credem. Additionally, the company’s price relative to its net book value makes the stock appear relatively cheap.
On the other hand, according to the fair value, calculated with the discounted cash flow method, it expresses an undervaluation of approximately 20%.
Analysts covering the stock have medium consensus rack up with an average target price that expresses an undervaluation of around 23%.
Triple bottom and restart on the upside? This could be the most likely scenario for the Credem title according to the graphical analysis
The title Credem (MIL: CE) closed the session on 21 June up by 1.07% compared to the previous session at 5.69 euros.
Weekly time frame
For the third time starting from November 2021, prices are facing support in the € 5.49 area (I price target). Triple bottom and restart on the upside?
Failure to maintain this level at the end of the week could give prices a bearish acceleration whose most probable target could be placed in the 4.71 euro area. The maximum bearish extension, on the other hand, could go to the 3.93 euro area.
If, on the other hand, the support were to hold, we could at least witness a rebound up to the 6 euro area. Exceeding this level, then, could open the door to a longer-term bullish reversal.
The geopolitical situation becomes complicated with the entry on the scene of a variable that is perhaps underestimated