Italy-based Intesa Sanpaolo S.p.A. (IT:ISP) has received a Buy rating confirmation from Goldman Sachs, predicting a significant upside potential of 65.5% in the share price. Analyst Chris Hallam from Goldman Sachs reiterated his Buy rating on the stock yesterday at a price target of €4.0. Over the last month, analysts have reaffirmed Buy ratings for the stock, emphasizing their confidence in the company’s future prospects.
Projections from analysts indicate a potential upside of over 35% in the share price.
At the time of writing, the bank’s stock had risen by 0.87%. Year-to-date, the stock has experienced a gain of approximately 14% in trading.
Intesa Sanpaolo is the largest banking group in Italy, boasting global operations spanning across Europe, Asia, the U.S., and Africa.
Positive Outlook
Analysts have shown increased optimism towards the stock in the past month. The ratings were primarily influenced by the company’s first-half earnings for FY23. Following the disclosure of record half-year earnings, the company has adjusted its profit outlook, attributing it to the expectation of continuous revenue growth fueled by higher interest rates. Analysts believe the bank possesses the capability to sustain profitability consistently in a challenging environment, thanks to its diversified business model.
The bank anticipates a net interest income exceeding €13.5 billion for the entire year 2023. The net interest income for Q2 2023 was €3.58 billion. The projected net profit for 2023 is now expected to be above the previous forecast of €7 billion, with continued growth in 2024-25.
Additionally, the net profits in 2025 are expected to benefit by €0.5 billion from the recent launch of digital operations in both commercial and private banking, aimed at cost reduction.
Intesa is also making substantial investments in technology with the goal of migrating its IT infrastructure to the cloud. This initiative aims to provide low-cost banking and wealth management services, particularly targeting its less profitable clients. The company has set an ambitious target of surpassing 2.5 million clients by the first quarter of 2024, with plans to double this number by the end of 2025. This growth strategy includes the migration of 4 million of its existing clients.
Intesa Sanpaolo Share Price Target
ISP stock currently holds a Strong Buy rating on TipRanks, backed by 10 Buy and two Hold recommendations. The Intesa Sanpaolo share price target is €3.37, signalling a substantial 39% increase from the current trading level.
