BAP - Credicorp: No Stopping Peru's Financial Champion Into 2024

2024-03-13 04:03:34 ET

Summary

• After a volatile 2023, Credicorp looks poised to turn the page this year.
• Management has kept the bar manageable, so there’s room for more beats and raises.
• Credicorp’s equity valuation may also be higher now, but is by no means detached from its fundamentals.
• The well-covered yield means investors get paid well to sit and wait for this growth story to play out.

The worst looks to be over for Peruvian financial conglomerate Credicorp ( BAP ) after some big external shocks in 2023 - recall the political unrest early in the year (from the coup against former President Castillo ) and weather-related headwinds in the back half. After a torrid few months, Q4 numbers finally saw some resilience, with the updated guidance (both qualitative and quantitative) also pointing to a much better year ahead. Management's near-term targets aren’t all that demanding either, and a ~17% return on equity profile (in line with historical levels) seems well within reach as El Niño fades....

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