Sunday, August 14

BBVA and Turkey: aid on the lira while Fitch leaves the country’s outlook negative

BBVA moves cautiously in the market. Since November 26, on account of Black Friday, the value has already lost a loss of 8.5% despite the intermediate rebound of last week. Uncertainty persists while omicron is called into question about a recovery that is in the air, as well as global monetary policy.

A fundamental issue for entities while BBVA takes advantage of the falls to increase its treasury stock, and, therefore, investing in their shares in the market with that buyback that already exceeds 10 days in duration. At the end of December 1, in the CNMV records reaches 0.658% of the capital with 0.434% direct and 0.223% indirect. It is an amount that reaches, as Expansión points out, a market value of 210 million euros, which is the highest since January 2019 for the entity. These are purchases that exceed 58 million euros and sales of just over 30 million shares.

In its stock chart we see that the stock still does not recover from the omicron effect pending events, while the impact on its Turkish exposure and its disagreements also remains in a value that loses 20% in the last 20 trading sessions, that moves away from the value of maximums and minimizes the annual profits that touch 22%

BBVA annual price of the security

And pending what happens with the lyre that has stabilized following the intervention of the Turkish Central Bank in its support once Fitch has revised down the country’s outlook to negative from stable due to the risks created by their recent monetary policy, since they consider that the central bank cannot adequately defend the lira due to its depleted reserves.

The technical indicators of Investment Strategies show us that BBVA is placed in consolidation mode, with a note down one point, that reaches 6 total points of the 10 possible for the value. With long-term uptrend and medium bearish trend, also mixed the total moment, that the slow positive and fast negative for the value. The volume of business is growing in the medium and long term the growing, in its two aspects, the range of amplitude of the value.

BBVA the verticality of the recent price corrective process results in the accumulation of bulky oversold readings in oscillators, lchasing for bouncing up from 4,789 euros, rebound that would establish its next resistance if it occurred at the height of the bearish gap projected from 5,178 euros, a level that is an approximation to its simple moving average of 200 periods or long-term, tells us José Antonio González, EI technical analyst.

BBVA on daily chart with average amplitude range in percentage, MACD oscillator and trading volume

BBVA technical analysis of the value

And from the fundamental point of view, the Investment Strategies analyst María Mira highlights that “at current prices and with an estimated EPS for the close of 2021 of € 0.61 / share, the market pays a PER of 10v, in line with the average multiple for its main competitors. The market pays 0.78v its book value, compared to an average for Spanish financial institutions of 0.67v, therefore, there is no discount for this multiple ”.

In her analysis, the fundamental expert on Investment Strategies considers that “the stock does not seem expensive, but it has greater risk than its competitors because it is present in geographies such as Turkey. Based on our fundamental analysis, we maintain a neutral recommendation for a long-term investment. Action with a higher than average risk ”.

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