Unicredit’s Capital Markets Day Brought Much Needed Clarity and Improved Earnings Visibility

No-moat Unicredit's recent capital markets day was well received, with its share price rallying by 11% on the day. The capital markets day gave much-needed clarity on new CEO Andrea Orcel's strategic thinking. Orcel has been Unicredit CEO for seven months. Unicredit's drawn-out, aborted takeover of fellow Italian bank Monte dei Paschi di Siena has previously prevented him from outlining his strategy for Unicredit. Unicredit now targets a 10% return on tangible equity by 2024, with a target common equity Tier 1 base of 12.5%-13%. Unicredit intends to distribute EUR 16 billion to shareholders between 2021-24. We are likely to increase our current EUR 12 per share fair value estimate when we include the new guidance into our model.