Extra Earnings From UniCredit's Stakes in Peers Provide Upside -- Market Talk

Dow Jones08-27

0555 GMT - UniCredit's upside from its investments in Commerzbank and Alpha Bank aren't adequately captured in consensus, Citi says in a research note, resuming its buy rating on the stock with a 74 euro target price. The large stakes the Italian bank owns in its German and Greek peers should add an incremental 800 million euros of revenues per year, net of hedging costs, analysts write. They think that a deal for Commerzbank is unlikely given opposition from the German government. "Even if UniCredit were to walk away it still leaves the firm with a healthy profit on their investment," they note. Analysts calculate a capital-return yield of around 10% to 11% with additional M&A optionality. While UniCredit has upside, Citi prefers peer Intesa Sanpaolo, which offers a slightly superior return on tangible equity for the same multiple. (elena.vardon@wsj.com)

(END) Dow Jones Newswires

August 27, 2025 01:56 ET (05:56 GMT)

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They think that a deal for Commerzbank is unlikely given opposition from the German government. \"Even if UniCredit were to walk away it still leaves the firm with a healthy profit on their investment,\" they note. Analysts calculate a capital-return yield of around 10% to 11% with additional M&amp;A optionality. While UniCredit has upside, Citi prefers peer Intesa Sanpaolo, which offers a slightly superior return on tangible equity for the same multiple. 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The large stakes the Italian bank owns in its German and Greek peers should add an incremental 800 million euros of revenues per year, net of hedging costs, analysts write. They think that a deal for Commerzbank is unlikely given opposition from the German government. \"Even if UniCredit were to walk away it still leaves the firm with a healthy profit on their investment,\" they note. Analysts calculate a capital-return yield of around 10% to 11% with additional M&amp;A optionality. While UniCredit has upside, Citi prefers peer Intesa Sanpaolo, which offers a slightly superior return on tangible equity for the same multiple. 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