How do analysts see banking after the earnings season?

How do analysts see banking after the earnings season?

Banco Sabadell stands as the Ibex 35 banking stock with the greatest potential on the stock market, according to analysts. The entity, which accumulates a rise of 12% so far this year, has the potential to rise almost another 70% . Specifically, the analysts compiled by Reuters give their average shares a buy recommendation, with a target price of 1.08 euros.

To find the price of Sabadell above the threshold of 1 euro, you have to go back to January 2020, before the outbreak of the pandemic. Although the bank flirted with those levels in February of this year, its price has suffered ups and downs since then, with the last burden of the new banking tax announced by the Government.

Last Thursday, the bank announced that it closed the first half of 2021 with an attributable net profit of 393 million euros , 78.6% more than the same period last year, with a return on tangible capital (ROTE) of 7 %, exceeding the objectives of the strategic plan.

Behind Sabadell is Banco Santander , which has the dubious honor of being the bank with the worst performance on the Ibex 35 so far this year. The entity chaired by Ana Botín falls by almost 18% in 2022, but analysts have not yet completely lost faith in it, although some are beginning to doubt it . On average, the analysis houses place their target price at 3.99 euros, 68% above the current price, with a ‘buy’ advice.

The entity earned 4,894 million euros between January and June , which is 33% more year-on-year (+21% in constant euros), after restructuring charges were applied in the previous year. In the second quarter, attributable profit was 2,351 million euros, 14% more year-on-year (+2% in constant euros).

CaixaBank, BBVA and Bankinter

If Santander is the ugly duckling of the Stock Market, the big star is Caixabank , which accumulates a rise of almost 30%. And the truth is that analysts think it has room to continue rising: on average, the target price is set at 3.9 euros, 32% above the current price. The advice is to buy, too.

Caixabank obtainedan attributable profit of 1,573 million euros in the first half of 2022, 17.1% morecompared to the same period of the previous year, based on homogeneous perimeters. Likewise, the accounting result increased by 23.1% without including the extraordinary effects derived from the merger with Bankia.

As to BBVA, analysts give it a potential on the stock market of 44%, with a target price of 6.33 euros and a ‘buy’ recommendation. Like Santander, the bank is in negative so far this year, with an accumulated drop in these seven months of 12%. The entityobtained an attributable profit of 3,001 million euros in the first half of 2022(+59.3% year-on-year in constant euros, +57.1% in current euros), as announced last week.

Among the Ibex 35 banks, the only one that does not have a ‘buy’ recommendation isBankinter. On average, the analysis houses advise ‘maintaining’ the entity’s shares, although the potential for revaluation is considerable: the 5.68 euros set are more than 35% above the current price. The group reached June 30a net profit of 271 million euros, 10.8% more than in the first half of 2021.

Samuel Edwards
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