What is BPE.MI's Intrinsic value?

Bper Banca SpA (BPE.MI) Intrinsic Value Analysis

Executive Summary

As of October 26, 2025, Bper Banca SpA's estimated intrinsic value ranges from $5.10 to $5.70 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Dividend Discount Model (Multi-Stage) $5.10 -47.3%
Dividend Discount Model (Stable) $5.70 -41.0%

Is Bper Banca SpA (BPE.MI) undervalued or overvalued?

With the current market price at $9.67, the stock appears to be significantly overvalued.

Understanding Intrinsic Value

Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Bper Banca SpA's intrinsic value, including:

  1. Dividend Discount Model (DDM): Values the company based on expected future dividend payments

Weighted Average Cost of Capital (WACC)

The cost of capital is a critical factor in valuation models, representing the required return for investors.

WACC Component Low High
Long-term bond rate 3.7% 4.2%
Equity market risk premium 8.3% 9.3%
Adjusted beta 1.17 1.64
Cost of equity 13.4% 19.9%
Cost of debt 5.0% 5.0%
Tax rate 15.6% 23.6%
Debt/Equity ratio 1.3 1.3
After-tax WACC 8.2% 10.8%

Valuation Methods

2. Dividend Discount Model (DDM)

The DDM values a company based on its expected future dividend payments. We used two approaches:

Multi-Stage DDM:

  • Current payout ratio: 55.6%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 16.6%
  • Long-term growth rate: 3.5%
  • Fair value: $5.10 (-47.3% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 19.9% (Low) to 13.4% (High)
  • Long-term growth rate: 2.5% (Low) to 4.5% (High)
  • Fair value range: $3 to $8
  • Selected fair value: $5.70 (-41.0% from current price)

Key Financial Metrics

Metric Value
Market Capitalization $19003M
Enterprise Value $46010M
Trailing P/E 12.01
Forward P/E 12.73
Trailing EV/EBITDA 0.00
Current Dividend Yield 467.42%
Dividend Growth Rate (5Y) 243.95%
Debt-to-Equity Ratio 1.30

Investment Decision Framework

To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:

  1. Forecast Certainty: DCF methods rely on long-term projections, while earnings power value focuses on current normalized earnings
  2. Business Model Alignment: Dividend models are more appropriate for mature companies with established dividend policies
  3. Historical Accuracy: How well each method has predicted fair value historically

Valuation Weight Matrix

Valuation Method Weight Weighted Value
Dividend Discount Model (Multi-Stage) 57% $1.02
Dividend Discount Model (Stable) 43% $0.86
Weighted Average 100% $5.36

Investment Conclusion

Based on our comprehensive valuation analysis, Bper Banca SpA's intrinsic value is $5.36, which is approximately 44.6% below the current market price of $9.67.

Key investment considerations:

  • Historical dividend growth of 243.95%

Given these factors, we believe Bper Banca SpA is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.