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

• Market Cap: €7.73B
• Dividend Yield: 4.87%
• Average Volume (3M): 853.34K
• Price to Earnings (P/E): 11.9
• Beta (1Y): 1.41
• Revenue Growth: -10.80%
• EPS Growth: 20.43%
• Country: IT
• Employees: 3,720
• Sector: General
• Sector Strength: N/A
• Industry: Banks - Regional
• EPS (TTM): 0.30
• 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): 1.30
• 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): 1.38
• Revenue Forecast (FY): €1.71B

• Rating: 72 Outperform
• Price Target: €20.00 ▲(17.72% Upside)
• Action: Reiterated Date: 11/11/25
• Date: Action: Reiterated 11/11/25

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

High profitability and margins

Sustained high gross, EBIT and net margins alongside a large reported revenue increase suggest the bank's core lending and fee operations are highly profitable. Durable margins support internal capital generation, bolster loss-absorption capacity and fund reinvestment without reliance on volatile market funding.

Strong returns and improving equity

An ROE of 13.8% with an improving equity base indicates effective use of shareholder funds and capacity to grow via retained earnings. Over a multi-month horizon this enhances financial flexibility, reduces need for frequent capital raises and provides a buffer for credit cyclical stress.

Relationship-driven regional model

The bank's model—local SME lending, mortgages, fee income and partnerships with municipalities—builds sticky deposit funding and cross-sell opportunities. This regional, relationship-oriented franchise supports stable customer flows and lower acquisition costs, underpinning steady structural income.

Negative Factors

Volatile/uncertain revenue trend

Conflicting revenue signals (a negative RevenueGrowth metric versus a large one-year increase noted elsewhere) point to top-line volatility or inconsistent reporting windows. Such variability undermines medium-term forecasting, provisioning and strategic planning for loan and fee growth.

Weak cash flow conversion

Negative operating cash flow and a 74% drop in free cash flow indicate earnings are not converting into liquidity. Over months this constrains the bank's ability to fund loan growth, sustain dividends or build reserves, increasing reliance on wholesale funding or asset sales in stress scenarios.

Moderate leverage and limited capital buffer

A debt-to-equity of 1.39 and an equity ratio toward the lower end for non-bank comparatives reduce loss-absorbing capacity. Structurally this limits room for credit expansion and raises the probability of needing capital actions or stricter lending standards if asset quality deteriorates.

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: Neutral
• 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 below the 20-day moving average (MA) of 17.66, below the 50-day MA of 17.18, and above the 200-day MA of 13.99, indicating a bullish trend. The MACD of 0.12 indicates Positive momentum. The RSI at 54.09 is Neutral, neither overbought nor oversold. The STOCH value of 54.45 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	€23.58B	12.97	13.13%	6.09%	5.23%	3.54%
CE	73 Outperform	€5.30B	8.57	14.69%	6.23%	-7.81%	4.89%
BPSO	72 Outperform	€7.73B	11.94	15.43%	4.87%	-10.80%	20.43%
BAMI	72 Outperform	€18.95B	9.12	16.45%	8.25%	2.23%	72.08%
BMED	71 Outperform	$13.45B	11.52	26.99%	6.35%	-5.10%	26.87%
BMPS	69 Neutral	€25.21B	5.40	15.13%	9.69%	-5.31%	-35.03%
Sector *	55 Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%