Market Overview

Goldman Initiates Itau Corpbanca At Buy, Sees 18% Upside

Goldman Initiates Itau Corpbanca At Buy, Sees 18% Upside

Goldman Sachs has started coverage of Itau Corpbanca (ADR) (NYSE: ITCB) with a Buy rating and a price target of $14, implying an upside of 18 percent, on growth potential and synergy benefits.

Itau Corpbanca, which was formed with the merger of Itaú Unibanco's Chilean operation and CorpBanca, is the fifth-largest bank in Chile by assets, and the fifth-largest in Colombia.

Goldman expects merger "synergies and know-how brought by Itaú Unibanco to lift profitability over the next three years, leading ROA to increase by 40 bp from the 2013–2015 average."

The company "has outlined US$100 million in recurring synergies that can be obtained over a three-year period," primarily on the cost side, and Goldman expects the target is achievable.

Related Link: Puerto Rico Being Sued By Hedge Funds For Dodging Payments

"We do not see this reflected in shares, which trade at a deep discount to peers in Chile, particularly if medium-term EPS (with full synergies) is considered," analyst Carlos Macedo wrote in a note.

Macedo said Itaú Unibanco's experience in consumer lending should allow Itau Corpbanca to address some of the main shortcomings it has compared to peers.

"Better funding costs should be an early win, but we believe the bank will be more effective in selling saving and lending products retail clients, partially through improved segmentation, and will also improve its credit card business," Macedo highlighted.

The analyst expects 2016 EPS of $0.48 on revenue of $1.59 billion.

At the time of writing, ADRs of Itau Corpbanca were up 1.86 percent to $12.04.

Latest Ratings for ITCB

Aug 2018CitigroupUpgradesNeutralBuy
Jun 2016Goldman SachsInitiates Coverage onBuy

View More Analyst Ratings for ITCB
View the Latest Analyst Ratings


Related Articles (ITCB)

View Comments and Join the Discussion!

Posted-In: Analyst Color Long Ideas Emerging Markets Price Target Initiation Markets Analyst Ratings Trading Ideas Best of Benzinga

Latest Ratings

View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at