In fact, the quarter ended with a net loss of 244 million euros, a worse result than in the same period last year (profit of 27.9 million). However, a component for 193 million euros contributed to this result on performing and non-performing loans linked to the new macroeconomic context and negative non-operating components for 112 million euros. The consensus, however, was for an 86 million euro red.
There are, however, also some positive aspects. The Common Equity Tier 1 Ratio fell to 13.6% from 14.7% at the end of 2019, however it is above the Srep threshold at 8.8%. In addition, the ratio of impaired loans to total loans fell to 11.8% from 12.4% in 2019. In absolute terms, the NPLs amounted to 5.8 billion euros, down 1.7 billion euros compared to the end of March 2019.
From the analysts’ point of view, the situation is still not very clear. The average consensus, in fact, is HOLD with an average target price which expresses an underestimation of just under 10%.
That the bank security is not doing well is also evident from the trend of the last month. Against a banking sector that gained about 6%, Banca MPS shares lost about 4%.
Looking at the fundamentals, one of the few positive aspects is the Price to Book ratio which is 0.1 for Banca MPS while 0.3 for the reference sector.
Yet Banca MPS is among the best bank stocks in terms of risk / reward ratio.
The indications of the graphic and forecast analysis on the Banca MPS security
Banca MPS (MIL: BMPS) closed the session on May 27 at € 1.098, up 4.47% on the previous session.
The projection in progress on the weekly time frame is bearish, but the achievement of the III ° price target in the € 1.1 area has curbed further lunges. We are therefore in a favorable condition to go upward with the 1st price target in the € 1.88 area. Then, the target is in the € 2.79 area, while the maximum extension of the rise is in the € 3.7 area with a bullish potential of over € 230.
If, on the other hand, we were to continue downwards, we would understand it from a weekly break of € 0.972 for a potential loss of about 10%.
We understand, therefore, what we mean when we say that Banca MPS is among the best banking stocks in Piazza Affari in terms of risk / reward.
Intesa Sanpaolo despite the recent collapse is overrated