Alvaro Serrano, an analyst from Morgan Stanley, maintained the Hold rating on Banco Bilbao Vizcaya Argentaria. The associated price target remains the same with €20.70.
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Alvaro Serrano has given his Hold rating due to a combination of factors related to BBVA’s recent performance and its forward guidance. The bank delivered a solid quarter with net profit slightly exceeding his estimates and broadly matching market expectations, helped by stronger net interest income and trading income, particularly in Spain and Mexico. However, this outperformance at the operating level was tempered by higher-than-expected provisions and a slightly weaker-than-anticipated capital ratio, even after accounting for the announced share buyback. The final dividend was consistent with his projections, though somewhat more generous than what the broader market had anticipated, further supporting the near-term investment case.
At the same time, management’s outlook appears somewhat cautious relative to Serrano’s prior assumptions, especially regarding profitability and revenue growth targets in Spain and Mexico. The bank’s medium-term return and efficiency goals are marginally below his forecasts, while expectations for net interest income growth and cost trends point to a more moderate earnings trajectory than he had modeled. Given that the shares are already trading at a relatively demanding valuation multiple compared with their projected returns, Serrano sees limited upside from current levels. As a result, he views the risk-reward profile as balanced rather than compelling, leading him to maintain a Hold recommendation on BBVA.
Serrano covers the Financial sector, focusing on stocks such as Unicaja Banco SA, Banco Bilbao Vizcaya Argentaria, and Intesa Sanpaolo SpA. According to TipRanks, Serrano has an average return of 8.0% and a 56.21% success rate on recommended stocks.
In another report released today, RBC Capital also maintained a Hold rating on the stock with a €19.75 price target.