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UniCredit SpA (IT:UCG)
:UCG
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UniCredit SpA
(UCG)
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Rating:63Neutral
Price Target:
€72.00
▲(12.69% Upside)
Action:ReiteratedDate:03/12/26
The score is driven primarily by strong profitability and returns, balanced by mixed quality signals (volatile revenue, inconsistent cash flow, and higher leverage in 2025). Technicals are a near-term headwind due to weak trend/momentum, while valuation and dividend yield provide meaningful support.
Positive Factors
Improved profitability and ROE
UniCredit's earnings recovered from a 2020 loss to €11.0B in 2025 with ROE near 15–16%. This durable improvement indicates stronger core profitability and earnings power, supporting retained earnings accumulation, dividend capacity, and the ability to absorb shocks or fund strategic initiatives over the medium term.
Stable equity base / capital
A relatively stable equity base around €60–68B provides a durable capital cushion for lending and regulatory buffers. This supports franchise resilience, underpins credit extension in core markets, and reduces the frequency of capital raises that could dilute long-term strategic flexibility.
Diversified franchise and regional presence
UniCredit's diversified business mix across retail, corporate, investment banking and asset management in Italy and CEE creates structural revenue breadth. A broad deposit base and cross-sell opportunities across segments and geographies support more resilient net interest and fee generation over multi-quarter horizons.
Negative Factors
Revenue volatility and recent decline
Revenue swings, including an ~8.6% decline in 2025, suggest earnings depend on cycles or one-off drivers. Persistent top-line instability undermines confidence in sustainable margins and makes planning for credit loss provisioning, cost investments, and dividend policy more difficult over the medium term.
Inconsistent cash flow conversion
Multi-year swings in operating and free cash flow reduce predictability of internal funding. Even with 2025 positive FCF near earnings, prior deep negatives indicate earnings quality and working capital variability that could constrain reliable investment, buybacks, or steady dividend funding.
Leverage uptick in 2025
Debt-to-equity rising to ~2.6x in 2025 marks a reversal of earlier de-leveraging. Higher leverage increases sensitivity to funding stress and regulatory capital needs, narrows strategic flexibility, and raises the firm's exposure to rising funding costs or credit shocks over the coming quarters.
UniCredit SpA (UCG) vs. iShares MSCI Italy ETF (EWI)
Market Cap
€96.34B
Dividend Yield4.15%
Average Volume (3M)6.45M
Price to Earnings (P/E)10.3
Beta (1Y)1.37
Revenue Growth26.99%
EPS Growth10.44%
CountryIT
Employees75,265
SectorFinancial
Sector Strength70
IndustryBanks - Regional
Share Statistics
EPS (TTM)1.22
Shares Outstanding1,507,953,000
10 Day Avg. Volume8,084,264
30 Day Avg. Volume6,454,573
Financial Highlights & Ratios
PEG Ratio0.57
Price to Book (P/B)1.68
Price to Sales (P/S)4.83
P/FCF Ratio11.04
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
€87.47Price Target Upside36.90% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering7
EPS Forecast (FY)7.24
Revenue Forecast (FY)€26.00B
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 22, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:May 06, 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
Profitability and returns are strong (net income up to €11.0B in 2025; ROE ~15–16%), but overall quality is held back by sharp revenue volatility (2025 revenue down ~8.6%), uneven multi-year cash-flow conversion, and a leverage uptick in 2025 (debt-to-equity ~2.6x).Income Statement
Profitability is strong and improving versus earlier years: annual net income rose from a loss in 2020 (-€2.8B) to €9.5–€9.7B in 2023–2024 and €11.0B in 2025, with net margin expanding to ~47% in 2025 (from ~21% in 2023–2024). Operating profitability also strengthened (EBIT margin ~58% in 2025). The key weakness is revenue volatility: revenue accelerated in 2022–2023, was modestly up in 2024, and then dropped sharply in 2025 (down ~8.6%), which raises questions about the durability of the earnings step-up.78
Positive
Balance Sheet
Capital and returns look solid for the period: return on equity improved from negative in 2020 to ~15–16% in 2023–2025, supported by a fairly stable equity base (~€60–€68B). However, leverage remains a clear constraint. Debt-to-equity improved materially from very elevated levels in 2020–2021 (~5.5x and ~4.6x) to ~1.8–2.0x in 2022–2024, but ticked higher again in 2025 (~2.6x) alongside higher debt, signaling a less favorable leverage direction most recently.64
Positive
Cash Flow
Cash generation is inconsistent year-to-year. Operating and free cash flow were strongly positive in 2020 and 2022, deeply negative in 2021, 2023, and 2024, and then returned to positive in 2025 (operating cash flow ~€11.0B; free cash flow ~€10.3B). While 2025 free cash flow was broadly in line with earnings (about 93% of net income), the multi-year pattern of large negative swings reduces confidence in the stability and predictability of cash conversion.48
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 25.68B | 23.46B | 46.75B | 44.93B | 26.75B | 22.29B |
| Gross Profit | 25.68B | 22.80B | 26.58B | 25.36B | 21.04B | 18.67B |
| EBITDA | 14.79B | 13.68B | 14.17B | 13.08B | 8.59B | 3.27B |
| Net Income | 10.60B | 11.02B | 9.72B | 9.51B | 6.46B | 2.10B |
Balance Sheet | ||||||
| Total Assets | 860.33B | 870.24B | 784.00B | 784.97B | 857.77B | 916.67B |
| Cash, Cash Equivalents and Short-Term Investments | 41.80B | 125.86B | 54.32B | 72.34B | 134.24B | 162.27B |
| Total Debt | 219.75B | 202.00B | 122.72B | 192.06B | 115.46B | 286.56B |
| Total Liabilities | 791.91B | 802.13B | 721.16B | 720.73B | 794.28B | 854.58B |
| Stockholders Equity | 68.02B | 67.71B | 62.44B | 64.08B | 63.34B | 62.19B |
Cash Flow | ||||||
| Free Cash Flow | 0.00 | 10.27B | -8.33B | -41.72B | 9.09B | -8.76B |
| Operating Cash Flow | 0.00 | 10.99B | -7.08B | -41.13B | 10.26B | -7.52B |
| Investing Cash Flow | 0.00 | -30.14B | -1.06B | -787.00M | -237.00M | -699.00M |
| Financing Cash Flow | 0.00 | 15.70B | -10.99B | -8.45B | -5.55B | -1.41B |
UniCredit SpA Technical Analysis
Negative
63.89
Price Trends
71.32
Negative
68.32
Negative
64.60
Negative
Market Momentum
-2.31
Positive
36.66
Neutral
27.55
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IT:UCG, the sentiment is Negative. The current price of 63.89 is below the 20-day moving average (MA) of 68.72, below the 50-day MA of 71.32, and below the 200-day MA of 64.60, indicating a bearish trend. The MACD of -2.31 indicates Positive momentum. The RSI at 36.66 is Neutral, neither overbought nor oversold. The STOCH value of 27.55 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 | €21.92B | 16.76 | 13.48% | 6.09% | 5.23% | 3.54% | |
76 Outperform | €90.57B | 10.67 | 14.41% | 6.08% | -10.70% | 7.46% | |
72 Outperform | €17.99B | 9.48 | 18.92% | 8.25% | 2.23% | 72.08% | |
71 Outperform | €11.71B | 10.31 | 40.02% | 3.35% | 2.97% | 4.64% | |
70 Outperform | €12.99B | 12.07 | 11.91% | 6.61% | -0.72% | 6.52% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
63 Neutral | €96.34B | 10.29 | 16.32% | 4.15% | 26.99% | 10.44% |
* Financial Sector Average
IT:UCG
UniCredit SpA
63.89
11.78
22.60%
IT:BAMI
Banco BPM S.p.A.
11.90
2.64
28.50%
IT:BPE
BPER Banca S.p.A.
11.17
4.12
58.39%
IT:FBK
FinecoBank SpA
19.15
1.20
6.70%
IT:ISP
Intesa Sanpaolo SpA
5.21
0.60
12.88%
IT:MB
Mediobanca Banca di Credito Finanziario S.p.A.
16.11
-0.89
-5.22%
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.