On Wednesday, Berenberg initiated coverage on Banco Bilbao (NYSE:BBVA) Vizcaya Argentaria (NYSE:BBVA (BME:BBVA)) stock, assigning a Hold rating with a price target of $10.10.
The bank's performance has been notable, as its shares have outpaced the banking sector by approximately 15% year-to-date, propelled by a consistent revenue growth. This trend is particularly strong in Spain, where it is supported by rising interest rate expectations and well-managed deposit costs.
The firm anticipates that, despite ongoing cost pressures, Banco Bilbao Vizcaya Argentaria will see its net income increase by nearly double digits year-over-year in 2024. The potential for further extraordinary share buybacks is also on the horizon, which could lead to total annual yields between 9% and 10%.
The current momentum of Banco Bilbao Vizcaya Argentaria's business is reflected in its valuation, according to Berenberg. The shares are currently trading at 8.2 times the firm's estimated earnings per share for 2025, which represents about a 10% premium compared to the broader sector. This assessment suggests that the bank's current business progress is already factored into the stock price.
Berenberg's coverage on BBVA also extends to the bank's American Depositary Receipts (ADRs), which have been given the same price target of $10.10. The ADRs offer investors a way to engage with the bank's stock through U.S. markets. The Hold rating indicates that Berenberg views the stock as fairly valued at the current levels, taking into account the bank's performance and market position.
InvestingPro Insights
As Banco Bilbao Vizcaya Argentaria (BBVA) continues to navigate the financial landscape, real-time data from InvestingPro provides a deeper look into the bank's current market standing. With a market capitalization of $60.79 billion and a P/E ratio that stands at a competitive 8.06, BBVA's financial health appears robust. The bank's performance is further underscored by a strong revenue growth of 14.66% over the last twelve months as of Q1 2024, signaling a solid upward trajectory in its financial operations.
An InvestingPro Tip points out that BBVA is trading at a low P/E ratio relative to near-term earnings growth, which could suggest potential for investors considering the bank's earnings prospects. Additionally, BBVA has demonstrated a strong return over the past year, with a total price return of 53.86%, reflecting investor confidence in the bank's strategic direction and execution.
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