Unicredit: Oddo says stock's discount is excessive

(CercleFinance.com) - Oddo believes that the presentation of the 2019 budget by the Italian government is once again shaking the markets, based on fears that public finances are out of control.


We expect these tensions to calm and reiterate our positive stance on the Italian banking sector (Intesa Sanpaolo/Unicredit), whose fundamentals are intact despite these turbulences, Oddo says.

Oddo remains a buyer of the Unicredit stock, with a target price of 19 euros (against 19.5 euros). Indeed, it remains as our best pick in Italy at this stage, given the greater geographical diversification of its business model (retail banking in Italy represents ~ 30% of results) and an investment theme that is mainly based on the sound execution of a strategic plan that is mainly focused on cleaning/strengthening its balance sheet and lower costs (vs. revenue growth), the broker explains.

The broker believes that the share's discount remains excessive given the confirmed momentum of improving fundamentals and the sound visibility regarding its operational recovery.

Copyright (c) 2018 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.