Banca Popolare di Sondrio S.C.p.A. (BPSO) AI Stock Analysis

• Market Cap: €7.88B
• Dividend Yield: 4.87%
• Average Volume (3M): 853.34K
• Price to Earnings (P/E): 12.0
• Beta (1Y): 1.36
• Revenue Growth: -10.80%
• EPS Growth: 20.43%
• Country: IT
• Employees: 3,720
• Sector: General
• Sector Strength: N/A
• Industry: Banks - Regional
• EPS (TTM): 0.39
• Shares Outstanding: 453,385,800
• 10 Day Avg. Volume: 648,379
• 30 Day Avg. Volume: 853,344
• PEG Ratio: 0.26
• Price to Book (P/B): 0.88
• Price to Sales (P/S): 2.50
• P/FCF Ratio: -5.82
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 72 Outperform
• Price Target: €19.50 ▲(14.77% Upside)

Banca Popolare di Sondrio's strong financial performance and attractive valuation are the primary drivers of its score. However, technical indicators suggest caution due to overbought conditions. The main risk lies in the negative cash flow, which needs addressing to sustain long-term growth.

Positive Factors

Robust profit margins

Sustained high gross, EBIT and net margins (approx. 45.8% and 32.6% in 2024) indicate durable cost control and pricing power in core banking operations. Strong margins support internal capital generation, improve resilience to interest-cycle swings, and underpin dividend capacity over the medium term.

High return on equity

A 13.8% ROE signals efficient deployment of shareholder equity and profitable lending operations. Persistently solid ROE helps attract and retain investor capital, funds organic growth, and supports distributions while absorbing moderate credit losses, strengthening long-term franchise value.

Local SME and retail franchise

A focus on retail customers and SMEs with local partnerships builds sticky deposit funding and deep client relationships. Relationship lending and diversified fee streams from advisory and transactional services create recurring revenue, reducing volatility and supporting stable growth over multiple economic cycles.

Negative Factors

Negative operating and free cash flow

Persistent negative operating cash flow and a 74% drop in free cash flow imply earnings are not converting to cash. This constrains capacity to fund loan growth, repay liabilities, or sustain dividends without relying on external financing, raising medium-term funding and liquidity risk.

Weak reported revenue trend

A negative revenue growth metric suggests pressure on core interest or fee income versus prior periods. If sustained, declining top-line reduces margin levers and could erode ROE and capital accumulation, forcing tighter credit or cost adjustments that weigh on strategic flexibility.

Moderate leverage and thin equity ratio

A debt-to-equity of 1.39 and an equity ratio near 7.3% provide limited capital buffer relative to unexpected losses. While typical for banks, a thinner equity base increases vulnerability to credit shocks and regulatory capital pressure, potentially constraining lending growth or requiring capital raises in stress scenarios.

Banca Popolare di Sondrio S.C.p.A. Business Overview & Revenue Model

Company Description

Banca Popolare di Sondrio S.p.A., together with its subsidiaries, provides various banking products and services in Italy. The company offers current accounts, savings deposits, certificates of deposits, time deposit accounts, and bonds; and loans comprising foreign currency loans, artisan loans, agricultural loans, personal loans, and mortgage loans primarily to retail customers and SMEs. It also offers repurchase agreements, securities lending, custody and administration of securities, consultancy, individual portfolio management, guarantees, leasing, and factoring services. In addition, the company provides credit and debit cards, and insurance products, as well as collection and payment services; manages hotels; issues government securities and prime corporate bonds; and manages and maintains rented units. As of December 31, 2021, it operated 350 branches. The company was founded in 1871 and is headquartered in Sondrio, Italy.

How the Company Makes Money

Banca Popolare di Sondrio generates revenue through various key streams, primarily from interest income earned on loans provided to customers. The bank offers personal loans, mortgages, and business financing, which yield interest payments that contribute significantly to its earnings. Additionally, BPSO earns income from fees associated with banking services, including account maintenance, transaction services, and advisory fees for investment and wealth management services. The bank also engages in treasury operations, managing its liquidity and investments to generate additional income. Significant partnerships with local businesses and municipalities further enhance its ability to serve clients and expand its customer base, thereby contributing to its financial performance.

Banca Popolare di Sondrio S.C.p.A. Financial Statement Overview

Summary

Banca Popolare di Sondrio demonstrates strong revenue growth and profitability, supported by a solid balance sheet. However, significant challenges in cash flow, particularly negative operating and free cash flows, pose potential risks if not addressed.

Income Statement

Banca Popolare di Sondrio has demonstrated strong revenue growth, with a notable increase of 38.1% from 2023 to 2024. The gross profit margin and EBIT margin remain robust, both at approximately 45.8%. The net profit margin for 2024 is also commendable at 32.6%, reflecting efficient cost management. Overall, the bank shows a solid income statement with consistent profitability and growth.

Balance Sheet

The bank maintains a healthy balance sheet with an improving equity position, as indicated by the increase in stockholders' equity. The debt-to-equity ratio stands at 1.39, suggesting moderate leverage, typical for the banking sector. Return on equity is strong at 13.8%, indicating effective use of shareholder funds. The bank's equity ratio is 7.3%, reflecting a stable financial position, though slightly on the lower side for non-banking industries.

Cash Flow

The cash flow statement indicates challenges with negative free cash flow in recent years, particularly a decline of 74% from 2023 to 2024. The operating cash flow is negative, suggesting potential issues with core operational cash generation. The free cash flow to net income ratio is also negative, indicating that net income isn't translating into free cash flow effectively.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.99B	2.81B	2.47B	1.32B	1.23B	987.63M
Gross Profit	1.53B	1.79B	1.60B	1.16B	1.11B	883.24M
EBITDA	1.02B	920.20M	735.05M	419.13M	429.46M	218.31M
Net Income	647.64M	574.94M	461.16M	251.32M	268.63M	106.60M
Balance Sheet
Total Assets	56.57B	56.63B	57.72B	57.85B	55.02B	49.81B
Cash, Cash Equivalents and Short-Term Investments	2.39B	4.12B	4.92B	7.39B	7.94B	7.66B
Total Debt	6.25B	5.78B	16.77B	4.19B	4.42B	3.43B
Total Liabilities	52.25B	52.47B	53.91B	54.47B	51.64B	46.71B
Stockholders Equity	4.33B	4.16B	3.81B	3.39B	3.27B	3.00B
Cash Flow
Free Cash Flow	0.00	-629.23M	-2.43B	1.45B	286.12M	3.22B
Operating Cash Flow	0.00	-505.88M	-2.31B	1.58B	344.51M	3.26B
Investing Cash Flow	0.00	-41.48M	-71.18M	-198.45M	-43.32M	-27.01M
Financing Cash Flow	0.00	-252.06M	-126.92M	-89.94M	-26.42M	-14.00K

Banca Popolare di Sondrio S.C.p.A. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 16.99
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IT:BPSO, the sentiment is Positive. The current price of 16.99 is above the 20-day moving average (MA) of 16.88, above the 50-day MA of 15.71, and above the 200-day MA of 12.91, indicating a bullish trend. The MACD of 0.57 indicates Positive momentum. The RSI at 71.77 is Negative, neither overbought nor oversold. The STOCH value of 58.16 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IT:BPSO.

Banca Popolare di Sondrio S.C.p.A. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BPE	79 Outperform	€23.87B	10.59	13.13%	6.09%	5.23%	3.54%
CE	73 Outperform	€5.33B	8.36	14.69%	6.23%	-7.81%	4.89%
BPSO	72 Outperform	€7.88B	12.02	15.43%	4.87%	-10.80%	20.43%
BAMI	72 Outperform	€19.36B	8.07	16.45%	8.25%	2.23%	72.08%
BMED	71 Outperform	€14.56B	12.46	26.99%	6.35%	-5.10%	26.87%
BMPS	69 Neutral	€27.96B	6.88	15.13%	9.69%	-5.31%	-35.03%
Sector *	55 Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%