Saturday, December 4

BBVA settled the offer to Garanti with hardly any changes in potential and target price

The market agrees that BBVA has preferred to avoid the risk with its offer to gain full control in GuaranteeBut they also recognize that there is growth potential if the uncertainties surrounding the country dissipate.

Despite the surprise and even bewilderment that the news left among the financial community, it was recognized BBVA’s ability to achieve long-term growth in emerging markets and the high knowledge of its leadership about the Turkish market.

Your president, Carlos Torres Vila, was the first to bet on Garanti as CEO and his successor in office, Onur YoungBeyond being Turkish, he always wanted to increase the weight in Garanti.

Therefore, the vast majority of investment entities that cover the entity chaired by Carlos Torres Vila They have preferred to set a waiting time and more so considering that this Thursday the group of Basque origin celebrates its Investor Day.

Of course, the few modifications have been upward. Alphavalue It was the only firm among those included in the Bloomberg panel of experts that has made a change in recommendation, from “reducing” to “adding” with a new target price up to 6.44 euros from the previous 6.43 euros.

Alphavalue breaks the tie in councils

In addition, its new valuation has broken the tie in the consensus between those experts who urge to “buy” shares and those who prefer to “keep” the titles in portfolio. Now, 50 percent of the advice is to “buy”, 40.6 percent from “hold” and the remaining 9.4 percent from “sell.”

Jefferies has raised the target price for the next 12 months by 11.7 percent, to 7.60 euros, the highest in the market consensus, and Caixabank BPI It has also increased it by 5 percent, to 7.15 euros.

With these modifications, the average target price of the consensus is placed at 6.59 euros and when the value is listed below 6 euros, due to the falls due to its offer on Garanti, BBVA shows a potential revaluation of more than 10 percent.

What to expect from Investor Day

After analyzing BBVA’s objectives in Garanti, where the market emphasized the fact that Turkey’s political and monetary instability does not seem to be going away in the short term, the financial community looks to Investor Day.

The key question that experts and investors wanted answered was what was to be done with the excess capital of 3.4 billion euros that still remained from the capital gain from the sale of the subsidiary of the USA and after the buyback of shares of 3,500 million euros.

It seems that with Garanti it is working and the experts influence that, although the bank has the capacity for other concentration operations, could use the surplus capital to continue giving back to shareholders via cash dividend or share buybacks.

The key to profitability

The ESG plot, which has a table in the assembly with investors, also seems to be covered by all the announcements made by the entity throughout the year and with the presentation on Turkey already covered, the options for surprises are reduced.

There will be another table on Spain and Mexico, where they can advertise formulas to increase their weight in the loan market or how to continue growing in market share, but lInvestment entities have an eye on profitability.

The consensus expects Torres Vila to offer the market a profitability target based on the ROTE. Analysts estimate that entity tIt has the capacity to offer a ROTE between 10-12 percent, according to several investment firms.

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