TOP WIKIFOLIO TRADE
Italy is the biggest beneficiary of the European recovery fund. Italy receives €260bn to salvage its economy and address longstanding structural issues. Banca IFIS SpA is an Italy-based bank and primarily engaged in the risky sector of trade receivables, non-performing loans and tax receivables. With 90% unsecured NPLs Banca Ifis runs one of the highest credit risk among Italian banks. But the potential returns could also be promising. Banca Ifis' credit losses could fall, while interest revenues rise and profit rallies if the economy recovers and interest rates rise. Assuming at this background a terminal 4% loan growth, 6% ROE and 7.2% weighted average cost of capital, my DCF-model would suggest for Banca Ifis a target share price of €19 (+50%).