Greater Visibility on 2022 DPS Supporting Our Positive View

Intermonte reported 1H22 results in line with our estimates and showing a more balanced revenue mix, with a lower weighting of market-related activities (Sales & Trading and Global Markets) in favour of Investment Banking and Digital Division & Advisory. The company stated that, in light of 1H trends and its capital solidity (IFR 3.9x), it has greater visibility on the possibility of confirming a dividend in line with 2021A, unless a further deterioration in the macroeconomic and market environment materialises. This would mean a 2022 DPS of EUR 0.26, in line with our estimate and implying an attractive 10.3% yield at the current share price. We reaffirm our positive view, also considering the group’s growth potential, especially in Investment Banking and Digital & Advisory Division.

We obtain a new target price of EUR 3.1/share, resulting from the average of a 3-stage DDM and a multiples’ analysis based on Equita, which we consider the closest peer. Given the around 23% upside potential from the current share price, we confirm our BUY rating.