Goldman Sachs made a broad recalibration of its Italian banking coverage on Friday, elevating Intesa Sanpaolo to a "buy" rating from "neutral" while lowering Banco BPM and opening coverage on two other lenders with differing recommendations and price targets.
The broker set a €6.9 12-month price objective for Intesa Sanpaolo, representing approximately 36% upside from current levels, after revising its views on earnings and capital distribution potential.
Goldman Sachs pointed out that Intesa has lagged the broader European banks index SX7P by about 7 percentage points since the start of the year. On a valuation basis, the bank's shares trade at 8.8x 12-month forward LSEG Consensus price-to-earnings, which Goldman Sachs notes is 5% below its European banks coverage average.
Looking ahead, Goldman Sachs projects sector-leading returns for Intesa of more than 20% across 2026-28, compared with a coverage average of roughly 16%. The firm also flagged an expected capital distribution yield of 11% for Intesa over the period.
Under Goldman Sachs estimates Intesa is assigned an 8.2x 2027 price-to-earnings multiple, versus a coverage average near 8.5x. The bank's profit projections sit 3% to 4% above Visible Alpha Consensus profit estimates for 2026-28, a gap the broker attributes to higher forecast net interest income, stronger fee income and lower loan loss provisions.
At the same time, Goldman Sachs reduced Banco BPM's rating from "buy" to "neutral." The firm said that the bank's elevated returns and capital-generation profile are "fully reflected in Visible Alpha Consensus Data EPS and DPS estimates for 2026-27."
Banco BPM is the only Italian bank in Goldman Sachs' coverage set forecast to show negative earnings-per-share growth in 2026. The brokerage still sees Banco BPM delivering a return on tangible equity of roughly 19% by 2027, versus a coverage average below 17%. Capital generation is expected to exceed 300 basis points by 2027, although Goldman Sachs added this level is "somewhat below that of its Italian peers."
Goldman Sachs also initiated coverage of Banca Monte dei Paschi di Siena with a "buy" rating and a 12-month price target implying roughly 35% upside. The firm highlighted Monte dei Paschi's revenue diversification and potential synergy gains from its acquisition of Mediobanca, which is expected to shift the bank's mix toward Wealth Management, Consumer Finance and Insurance.
On valuation metrics, Monte dei Paschi trades at 9.4x 12-month forward consensus price-to-earnings, slightly above the coverage average of 9.2x. Its price-to-tangible book ratio stands at 0.99x, below the sector level of 1.5x. Goldman Sachs concluded that "strong fundamentals and a sector-leading capital distribution yield are not fully reflected in current valuation levels."
Finally, Goldman Sachs began coverage of BPER Banca with a "neutral" recommendation and a €13.70 price target. The brokerage acknowledged that BPER has outperformed the SX7P index by more than 30 percentage points since January 2025, but said these positives appear "already largely reflected in the current share price."
After acquiring Banca Popolare di Sondrio, BPER rose to become Italy's third-largest bank, with more than 95% of its deposit base held in low-cost demand deposits, a structural funding characteristic Goldman Sachs noted in its assessment.
The set of changes illustrates Goldman Sachs' reassessment of earnings trajectories, capital returns and relative valuations across Italian lenders and reallocates its conviction among names that have differing growth, capital and valuation profiles.