Intesa Sanpaolo: Strong Earnings Supported By Robust Fundamentals

2026-01-02 04:14:28 ET

Following several quarters without dedicated follow-up, we are revisiting Intesa Sanpaolo ( ISNPY ) ( IITSF ). Here at the Lab, we continue to cover EU banks, and 2025 has been a standout year. Indeed, the EU sector earnings were revised up by roughly 10%; banks distributed an average dividend yield of 9%; and a 2.3x multiple re-rating pushed total returns to above 50%, far ahead of the broader EU market’s ~15–16%. Since our last update (Feb 2025), ISP's total return has been 63.75% (Fig. 1) (bringing our initial performance at 400%). At that time, we were ahead of the company's guidance, already projecting a new share buyback and net income comfortably above €9 billion (Fig. 2). With a ~17% RoTE, the Italian bank was still not fairly valued. Thus, we reiterated our buy rating. Despite this share price performance, we still believe the company is a buy....

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