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UniCredit SpA (IT:UCG)
:UCG
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UniCredit SpA
(UCG)
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Rating:75Outperform
Price Target:
€80.00
▲(12.04% Upside)
UniCredit SpA's strong financial performance and positive earnings call are the most significant factors driving the score. The company's robust profitability and strategic investments provide a positive outlook. Valuation metrics indicate the stock is undervalued, offering potential upside. However, technical indicators suggest caution due to bearish momentum, and cash flow challenges need addressing.
Positive Factors
Sustained Profitability
UniCredit's 19 consecutive quarters of profitable growth and record nine-month results show durable revenue momentum and repeatable earnings power. Sustained net profit improvements and ROTE above 20% support organic capital generation and medium-term strategic investments.
Capital and Liquidity Buffer
A CET1 ratio of 14.8% and liquidity coverage above 140% give UniCredit a significant capital and liquidity cushion. This strengthens regulatory resilience, preserves lending capacity through stress, and allows measured capital deployment for growth and shareholder returns over the medium term.
Capital Deployment and Cost Efficiency
Management's plan to deploy EUR 6.5bn of excess capital and a best-in-class cost/income trajectory supports sustainable margin expansion. Targeted capital redeployment combined with structural cost reductions should enhance recurring earnings and reinforce long-term shareholder value creation.
Negative Factors
Declining Net Interest Income
A 4% decline in net interest income over nine months pressures UniCredit's core revenue engine. For a commercial bank, sustained NII weakness erodes recurring margins, constrains net interest margin durability, and may force reliance on fee income or riskier asset growth to preserve profits.
Weak Cash Generation
Persistent negative free cash flow and operating cash outflows in 2024 undermine internal funding for dividends, buybacks, and reinvestment. Over several quarters this increases dependence on capital actions or markets to support shareholder returns and strategic initiatives, reducing financial flexibility.
Low Equity Ratio / Leverage Risk
An equity ratio around 8% indicates relatively thin loss-absorbing equity versus assets despite reported zero debt. In a banking context this leaves less buffer against unexpected losses, heightening sensitivity to regulatory changes (eg, bank levies) and potential restructuring costs in adverse scenarios.
UniCredit SpA (UCG) vs. iShares MSCI Italy ETF (EWI)
Market Cap
$111.22B
Dividend Yield4.15%
Average Volume (3M)3.76M
Price to Earnings (P/E)10.4
Beta (1Y)1.38
Revenue Growth26.99%
EPS Growth10.44%
CountryIT
Employees75,265
SectorFinancial
Sector Strength70
IndustryBanks - Regional
Share Statistics
EPS (TTM)1.69
Shares Outstanding1,557,675,200
10 Day Avg. Volume2,817,112
30 Day Avg. Volume3,763,722
Financial Highlights & Ratios
PEG Ratio0.47
Price to Book (P/B)1.04
Price to Sales (P/S)1.40
P/FCF Ratio-7.84
Enterprise Value/Market Cap0.00
Enterprise Value/Revenue0.00
Enterprise Value/Gross Profit0.00
Enterprise Value/Ebitda0.00
Forecast
1Y Price Target
$75.48Price Target Upside5.72% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
EPS Forecast (FY)7.15
Revenue Forecast (FY)$25.54B
UniCredit SpA Business Overview & Revenue Model
Company DescriptionUniCredit S.p.A. operates as a commercial bank that provides retail, corporate, and private banking services. It offers accounts and deposits, loans, cards, transactions and payments, funds, advisory, treasury, and insurance products, as well as digital and mobile banking services. The company also provides solutions for payments and liquidity, working capital, hedging, international trade, and treasury operations; and funding solutions comprising of structured, project, and commodity trade and export finance, as well as debt and equity funding; and structured investments and investments advisory solutions. In addition, the company provides corporate finance, capital structure, and rating advisory, as well as patient capital, financial sponsor solutions, and sustainable finance solutions. It servs retail, corporate, and public sector customers, as well as international companies and institutional clients. The company operates in Italy, Other European countries, America, Asia, and internationally. The company was formerly known as Unicredito Italiano S.p.A and changed its name to UniCredit S.p.A. UniCredit S.p.A. was founded in 1870 and is headquartered in Milan, Italy.
How the Company Makes MoneyUniCredit generates revenue primarily through interest income and fees. Interest income is derived from the interest earned on loans and advances to customers, which constitutes a significant portion of its overall revenue. Additionally, the bank earns fee income from various services, including transaction fees, asset management fees, and advisory services in investment banking. The bank also engages in capital markets activities, providing underwriting and trading services, which contribute to its earnings. Significant partnerships with corporations and institutional clients further enhance revenue opportunities, as do strategic initiatives aimed at expanding its customer base and improving operational efficiency.
UniCredit SpA Earnings Call Summary
Earnings Call Date:Oct 21, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Feb 05, 2026
Earnings Call Sentiment Positive
The earnings call presented a strong financial performance with record profits and well-maintained capital positions. Strategic investments and geographic diversification provide a positive outlook. However, challenges remain with the potential impact of the Italian bank levy and declining net interest income. Management is focused on growth, but potential restructuring costs could affect short-term financials.Q3-2025 Updates
Positive Updates
Record Third Quarter and Nine Months
UniCredit achieved the best nine months in its history, with 19 consecutive quarters of profitable growth. Net profit increased by 4.7% in the quarter and 12.9% over the nine months, maintaining a return on tangible equity above 20%.
Strong Capital and Liquidity Position
CET1 ratio remains well above target at 14.8%, and liquidity remains sound with a liquidity coverage ratio (LCR) above 140%.
Strategic Investments and Capital Deployment
Early deployment of EUR 6.5 billion of excess capital is expected to add EUR 1 billion to net revenues and net profit by 2027. EUR 9.5 billion in dividends and share buybacks for 2025 are confirmed.
Operational Efficiency
Costs are on a downward trajectory, supporting a best-in-class cost/income ratio of 36.8% for the nine months, maintaining strong operational efficiency.
Geographic and Business Diversification
UniCredit's performance is supported by geographic diversification, with strong contributions from Central and Eastern Europe and resilience in Germany and Austria.
Negative Updates
Impact of Italian Bank Levy
The Italian Government's draft bank levy is still under discussion, and UniCredit anticipates a potential impact, though it's currently diluted due to geographic diversification.
Decline in Net Interest Income (NII)
NII, net of loan loss provisions, declined by 4% in the nine months, reflecting the challenging interest rate environment.
Challenges in Austria
Net revenues in Austria declined by 1.4%, with a 5.7% decrease in NII, partially mitigated by loan growth and stable margins.
Potential Restructuring Costs
Management is considering potential restructuring costs in Q4 to support future growth, primarily from 2027 onwards.
Company Guidance
In the third quarter of 2025, UniCredit reported record-breaking performance, marking the 19th consecutive quarter of quality profitable growth. The company achieved a significant beat across key financial metrics, with net revenues and net profit showing substantial increases. Net profit rose by 4.7% in the quarter and 12.9% over the nine months, maintaining a return on tangible equity above 20%. The CET1 ratio remained robust at 14.8%, and liquidity was sound with an LCR above 140%. UniCredit confirmed its 2025 net profit guidance of EUR 10.5 billion, while also planning management actions to be expensed in Q4 2025, primarily focused on growth investments. Additionally, the company reinforced its double-digit growth trajectory in EPS, DPS, and tangible book per share, with a confirmed shareholder remuneration strategy involving EUR 9.5 billion in dividends and share buybacks for 2025. The company's diversified revenue base and operational efficiency were highlighted, with costs continuing their downward trajectory, supporting a best-in-class cost/income ratio.UniCredit SpA Financial Statement Overview
Summary
UniCredit SpA demonstrates strong revenue growth and high profitability. The balance sheet shows a healthy reduction in debt, enhancing financial stability, though the low equity ratio poses a risk. Cash flow challenges exist, but improvements are noted. Overall, the company is on a positive trajectory with some areas needing attention, particularly in cash flow management.Income Statement
The income statement shows strong revenue growth over recent years, with a 5.3% increase from 2023 to 2024. Net profit margins are robust, at approximately 39.1% in 2024, indicating significant profitability. However, the absence of EBIT and EBITDA figures in 2024 limits a more comprehensive assessment of operational efficiency.85
Very Positive
Balance Sheet
The balance sheet reflects a solid equity position with a total equity of €62.44 billion in 2024, translating to an equity ratio of approximately 8%. The company has reduced its debt to zero, which enhances financial stability. However, the low equity ratio suggests a potential risk in terms of leverage despite the absence of debt.75
Positive
Cash Flow
The cash flow statement indicates negative free cash flow in 2024, although an improvement from the prior year. Operating cash flow remains negative, raising concerns about cash generation from core activities. However, the significant reduction in operating cash outflows from 2023 to 2024 is a positive development.60
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 25.68B | 46.75B | 44.93B | 26.75B | 22.29B | 22.11B |
| Gross Profit | 25.68B | 26.58B | 25.36B | 21.04B | 18.67B | 18.43B |
| EBITDA | 14.79B | 14.17B | 13.08B | 8.59B | 3.27B | -1.08B |
| Net Income | 10.60B | 9.72B | 9.51B | 6.46B | 2.10B | -2.79B |
Balance Sheet | ||||||
| Total Assets | 860.33B | 784.00B | 784.97B | 857.77B | 916.67B | 931.46B |
| Cash, Cash Equivalents and Short-Term Investments | 41.80B | 54.32B | 72.34B | 134.24B | 162.27B | 177.47B |
| Total Debt | 218.34B | 122.72B | 122.52B | 115.46B | 286.56B | 325.23B |
| Total Liabilities | 791.91B | 721.16B | 720.73B | 794.28B | 854.58B | 871.51B |
| Stockholders Equity | 68.02B | 62.44B | 64.08B | 63.34B | 62.19B | 59.51B |
Cash Flow | ||||||
| Free Cash Flow | 0.00 | -8.33B | -41.72B | 9.09B | -8.76B | 81.89B |
| Operating Cash Flow | 0.00 | -7.08B | -41.13B | 10.26B | -7.52B | 83.32B |
| Investing Cash Flow | 0.00 | -1.06B | -787.00M | -237.00M | -699.00M | 569.00M |
| Financing Cash Flow | 0.00 | -10.99B | -8.45B | -5.55B | -1.41B | 660.00M |
UniCredit SpA Technical Analysis
Positive
71.40
Price Trends
66.29
Positive
64.76
Positive
59.95
Positive
Market Momentum
1.46
Positive
66.87
Neutral
50.76
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IT:UCG, the sentiment is Positive. The current price of 71.4 is above the 20-day moving average (MA) of 70.28, above the 50-day MA of 66.29, and above the 200-day MA of 59.95, indicating a bullish trend. The MACD of 1.46 indicates Positive momentum. The RSI at 66.87 is Neutral, neither overbought nor oversold. The STOCH value of 50.76 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IT:UCG.
UniCredit SpA Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | €23.58B | 10.50 | 13.13% | 6.09% | 5.23% | 3.54% | |
76 Outperform | €104.07B | 11.72 | 15.44% | 6.08% | -10.70% | 7.46% | |
75 Outperform | $111.22B | 10.37 | 15.67% | 4.15% | 26.99% | 10.44% | |
72 Outperform | €19.51B | 8.11 | 16.45% | 8.25% | 2.23% | 72.08% | |
71 Outperform | €13.81B | 21.19 | 32.83% | 3.35% | 2.97% | 4.64% | |
70 Outperform | €14.28B | 10.98 | 11.91% | 6.61% | -0.72% | 6.52% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% |
* Financial Sector Average
IT:UCG
UniCredit SpA
71.40
31.65
79.60%
IT:BAMI
Banco BPM S.p.A.
12.54
5.08
68.21%
IT:BPE
BPER Banca S.p.A.
12.06
6.19
105.31%
IT:FBK
FinecoBank SpA
22.43
5.39
31.63%
IT:ISP
Intesa Sanpaolo SpA
5.97
2.15
56.12%
IT:MB
Mediobanca Banca di Credito Finanziario S.p.A.
18.05
3.84
27.04%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.