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GRUPO C. OCCIDENTE: “FLOOR” NET PROFIT’24 OF € 550 M… AT 7X P/E? (ANÁLISIS BANCO SABADELL)

“Floor” Net Profit’24 of € 550 M, at 7x P/E? BUY
Net Profit’24 would exceed € 550 M (more than +15% vs. 2022 BS(e)), and it could come close even in 2023. The erosion of around € -60 M from 2022 stemming from ceded reinsurance will not apply, and Grupo Mémora will be incorporated (€ 20-25 M of Net Profit’23-24 without synergies), and there are potential cost savings following the restructuring of the Traditional Business (which we do not include out of caution). We raise Net Profit’23-24 by +20%, we roll our model over and raise our T.P. to € 50.60/sh. (+10% vs. previous; +75% upside). If we were to include the synergies from Mémora and the cost savings from the restructuring, the T.P. would stand at € 53/sh. (+5% current; +80% upside). Trading at 0.9x P/BV vs. 1.3x average structural P/BV for ROE of ~12.5%, we see these levels as very attractive.