Unicredit share price has done well in the past few years, making it one of the best-performing global banks. The UCG stock has jumped by 680% from its lowest point in 2020, bringing its market cap to over €64.48 billion. It has become the 39th biggest bank in the world.
Top Unicredit news
Unicredit, the giant Italian bank, has made headlines in the past few weeks, helped by its corporate actions.
Notably, the company has offered to buy Banco BPM, another top Italian bank in a €10 billion deal.
The biggest deal that Unicredit has made is its accumulation of Commerzbank shares. It has bought shares worth billions, making it the biggest shareholder in the bank. A move to acquire Commerzbank would be notable because it is the second-biggest bank in Germany after Deutsche Bank.,
Still, it is unclear whether Andrea Orcel will follow through with a full buyout of Commerzbank, a move that the German government resists. In a statement this week, Joerg Kukies, the German Finance Minister said:
“We have a very critical stance on this, and the head of Unicredit has said he does not want to ignore the criticism of the German government, so I expect that he won’t do it.”
A bid by Unicredit to acquire Commerzbank would be notable because of its size. It is a giant corporation with a market cap of over €18.90 billion and €631 billion in assets.
Read more: How Unicredit share price outperformed European banks
Unicredit business is doing well
These corporate actions are happening at a time when Unicredit’s business is doing well, helped by higher interest rates and cost structure.
Its most recent results showed that the company had its fifteenth consecutive quarter of profitable growth.
Its net revenue rose by 2.6% to over €5.9 billion in the third quarter. This revenue growth brought its nine-month revenue to over €18.5 billion, a 5.4% increase from the same period last year.
The net interest income dropped slightly to €3.5 billion, mirroring the performance of other banks. Its trading revenue fell by 7.7% to €441 million, while its fees and LLP revenues jumped by 8.5% and 19%.
Most importantly, Unicredit’s Return on Tangible Equity (RoTE) rose by 1.5% to 19.7%. The company’s balance sheet is also strong, with the closely-watched CET1 ratio rising by 47 basis points to 16.1%.
The CET1 ratio is an important number that looks at the amount a company has in relation to its risk-weighted assets. A higher ratio means that a company can handle a major financial crisis.
Unicredit’s higher CET ratio also explains why the company is doing its corporate activities. In contrast, companies like JPMorgan has a ratio of 15.3%, while Bank of America, Goldman Sachs, and Citigroup have less than 15%.
Unicredit has also boosted its payouts to investors. The most recent results showed that it paid a dividend of €1.4 billion and acquired shares worth €2.4 billion. It also boosted its annual profit target to €9 billion.
Unicredit share price analysis
The daily chart shows that the Unicredit stock price has bounced back in the past few days. This rebound happened after it bottomed at €35.50 on November 27. That was an important level since it coincided with the lower side of the ascending trendline that connects the lowest levels since December 2023.
The stock has jumped above the 50-day and 100-day Exponential Moving Averages (EMA). It is attempting to move above the key resistance point at €40, while the Relative Strength Index (RSI) pointed upwards.
Therefore, the stock will likely continue rising as bulls target the key point at €44, the upper side of the channel. This prediction implies an 11% upside from the current level.
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