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UniCredit SpA (IT:UCG)
:UCG

UniCredit SpA (UCG) AI Stock Analysis

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IT

UniCredit SpA

(OTC:UCG)

Rating:82Outperform
Price Target:
€65.00
▲(14.94%Upside)
UniCredit SpA exhibits a strong financial performance with notable revenue growth and profitability. The technical indicators suggest bullish momentum, and the valuation metrics indicate an undervalued stock. The optimistic guidance from the earnings call further boosts the outlook, although cash flow management and geopolitical risks are areas to watch.

UniCredit SpA (UCG) vs. iShares MSCI Italy ETF (EWI)

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 SpA generates revenue through various streams. Primarily, the bank earns income from interest on loans and advances to customers, which is a significant portion of its revenue. Additionally, UniCredit makes money from fees and commissions related to services such as asset management, investment banking, and transaction processing. Trading and investment activities also contribute to its earnings, as the bank engages in securities trading and investment in financial markets. UniCredit benefits from its strategic presence across multiple European countries, allowing it to leverage local market knowledge and maintain diversified revenue streams. Furthermore, partnerships with other financial institutions and businesses enhance its product offerings and expand its customer base, thereby contributing to its overall profitability.

UniCredit SpA Earnings Call Summary

Earnings Call Date:May 11, 2025
(Q1-2025)
|
% Change Since: 23.40%|
Next Earnings Date:Jul 29, 2025
Earnings Call Sentiment Positive
The earnings call highlighted a strong financial quarter with record-breaking profits, improved capital ratios, and strategic expansions. However, challenges such as NII decline and geopolitical issues in Russia were noted. Despite these, the overall sentiment leans towards optimism due to significant achievements and strategic initiatives.
Q1-2025 Updates
Positive Updates
Record-Breaking Quarter
Q1 2025 marked the best quarter in UniCredit's history with record results across all KPIs, including a net profit increase of 8.3% to EUR 2.8 billion and a return on tangible equity of 22%.
Strong Revenue Growth
Net revenue increased by 3.2% year-on-year with fees growing to 36% of total revenues. This was supported by excellent fee generation and trading performance.
Capital and Asset Quality Improvements
CET1 ratio increased to 16.1%, with organic capital generation of EUR 3.1 billion and a reduction in cost-to-income ratio to 35.4%, beating peers significantly.
Geographical and Segmental Performance
All regions, including Italy, Germany, Austria, and Central and Eastern Europe, showed strong financial performance with positive growth in fees and net income.
Successful Strategic Initiatives
Partnership with Google to accelerate the transformation by moving applications to the cloud, enhancing agility, and improving security.
Negative Updates
NII Decline
Net interest income (NII) showed a decline, especially noted in Austria, impacting overall revenue growth.
Challenges in Russia
Continued efforts towards an accelerated ordinary wind-down of Russian operations, with significant reductions in local deposits and loans.
Banking Sector Challenges
Macroeconomic environment remains challenging with pressures on NII due to normalizing rates and local volatility.
Company Guidance
During the UniCredit First Quarter 2025 Results Conference Call, the company provided an upgraded guidance for 2025, projecting net income to exceed 2024 levels, with a return on tangible equity (RoTE) above 17%. This guidance revision was driven by Q1 outperformance across nonoperating profit, net income, RoTE, and organic capital generation. Key metrics from Q1 included a 3.2% increase in net revenue, a 20% increase in NII RoAC, and an 8.3% rise in net profit to EUR 2.8 billion, achieving a 22% RoTE. The cost-to-income ratio improved to 35.4%, with cost reductions of 1.3% at constant perimeter. UniCredit's CET1 ratio increased to 16.1%, and the company generated EUR 3.1 billion of capital organically. The outlook for 2025 remains optimistic, with a focus on maintaining competitive strengths and leveraging structural advantages, while also considering further guidance upgrades in the coming quarters based on business performance.

UniCredit SpA Financial Statement Overview

Summary
UniCredit SpA demonstrates strong revenue growth and high profitability, with a solid balance sheet showing zero debt. However, the low equity ratio and negative cash flow from operations are concerns.
Income Statement
85
Very Positive
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.
Balance Sheet
75
Positive
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.
Cash Flow
60
Neutral
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.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
23.99B23.57B21.04B18.60B18.43B
Gross Profit
24.82B23.57B21.04B18.60B18.43B
EBIT
14.34B13.39B7.19B1.21B-2.46B
EBITDA
0.0012.19B8.23B0.00-544.00M
Net Income Common Stockholders
9.72B9.51B6.46B1.54B-2.83B
Balance SheetCash, Cash Equivalents and Short-Term Investments
41.55B72.34B111.80B162.27B165.62B
Total Assets
784.00B784.97B857.77B916.67B931.46B
Total Debt
0.0089.84B115.46B125.91B134.08B
Net Debt
-41.44B28.84B-18.48B-36.35B-31.53B
Total Liabilities
721.16B720.73B794.28B854.58B871.51B
Stockholders Equity
62.44B64.08B63.34B61.63B59.51B
Cash FlowFree Cash Flow
-8.33B-42.28B9.09B-8.76B81.89B
Operating Cash Flow
-7.08B-41.13B10.26B-7.52B83.32B
Investing Cash Flow
-21.33B-787.00M-237.00M-699.00M569.00M
Financing Cash Flow
-10.99B-8.45B-5.55B-1.41B660.00M

UniCredit SpA Technical Analysis

Technical Analysis Sentiment
Positive
Last Price56.55
Price Trends
50DMA
52.05
Positive
100DMA
49.17
Positive
200DMA
43.05
Positive
Market Momentum
MACD
1.36
Positive
RSI
58.44
Neutral
STOCH
67.60
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 56.55 is above the 20-day moving average (MA) of 56.29, above the 50-day MA of 52.05, and above the 200-day MA of 43.05, indicating a bullish trend. The MACD of 1.36 indicates Positive momentum. The RSI at 58.44 is Neutral, neither overbought nor oversold. The STOCH value of 67.60 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

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
ITUCG
82
Outperform
$86.62B9.3514.91%3.95%3.21%7.24%
64
Neutral
$12.80B9.717.59%16985.66%12.07%-7.53%
€15.37B7.9713.41%9.83%
€10.97B7.8713.24%7.77%
€11.61B17.9528.46%3.90%
€86.88B9.8213.56%6.97%
€16.38B12.5311.91%5.57%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
IT:UCG
UniCredit SpA
57.81
23.20
67.01%
GB:0RLA
Banco BPM S.p.A.
10.14
4.38
76.04%
GB:0MU6
BPER Banca S.p.A.
7.67
3.16
70.07%
GB:0QVF
FinecoBank SpA
19.16
4.94
34.74%
GB:0HBC
Intesa Sanpaolo SpA
4.92
1.59
47.75%
GB:0HBF
Mediobanca Banca di Credito Finanziario S.p.A.
19.56
6.14
45.75%
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.