JPMorgan Restarts Coverage of Banco BPM
JPMorgan announced that it has resumed coverage of Banco BPM, assigning a Neutral rating and a price target of €17 per share. The target price suggests an upside of roughly 6% from the current market level.
The coverage restart follows a financial tour to Milan where JPMorgan analysts, led by Delphine Lee, met senior executives of several major Italian banks. The consensus from those meetings was that revenue trends in Q3 remain reassuring, with a continuation of strong commercial momentum and resilient client activity despite typical August seasonality. Nonetheless, the analysts emphasized that the primary focus for the sector continues to be mergers and acquisitions (M&A).
Banco BPM’s standalone performance has been described as strong, bolstered by its recent acquisition of Anima. The bank has demonstrated solid commercial momentum, maintained controlled cost levels, and shown improving provisions. Over the past five years the bank’s stock has outperformed the broader sector by 100%, and it now trades at 10.5 times estimated 2028 earnings and 2.2 times net asset value, representing a premium relative to peers such as UniCredit, which trades at 8.4 times earnings.
Banco BPM characterized Monte dei Paschi di Siena’s unsolicited takeover offer as complex and lacking a premium for shareholders, noting that the proposal effectively comprises two separate deals, one of which involves Banca Generali. The bank also indicated that a combination with Credit Agricole could be attractive and value‑creative under the right conditions.
Credit Agricole currently holds a 29% stake in Banco BPM. JPMorgan estimated that, in a takeover scenario, Credit Agricole could offer a premium of up to 10%, assuming roughly €900 million in cost synergies. Conversely, a reverse scenario in which Credit Agricole increases its stake further could be accretive, particularly for BAMI shareholders, with an estimated earnings‑per‑share accretion of 18% or more for Banco BPM if its Cariparma unit were sold at less than 9‑10 times projected 2028 earnings. Any increase in Credit Agricole’s stake would require government approval.
Regarding UniCredit, JPMorgan noted that the bank remains focused on executing its integration strategy for Commerzbank, reiterating a target of €1.4 billion in cost synergies by 2030. The analysts described UniCredit’s approach as centered on CBK governance and the implementation of its integration strategy, with significant potential for market‑share gain in Italy arising from the ongoing M&A disruption. UniCredit aims to capture roughly half of Banco BPM’s market share organically through increased technology investment rather than pursuing acquisitions at current valuations. JPMorgan continues to prefer UniCredit among Italian banks, citing an attractive risk‑reward profile, strong profitability, an appealing yield, and undiscounted synergies from the Commerzbank deal. The firm remains restricted on both Intesa Sanpaolo and Unipol.