We recently published a list of 10 Most Undervalued Bank Stocks To Invest In According To Analysts. In this article, we are going to take a look at where Inter & Co, Inc. (NASDAQ:INTR) stands against other most undervalued bank stocks to invest in according to analysts.
The Banking Industry’s Outlook Under the Trump Admin
Amidst the enthusiasm of the new President Donald Trump for digital assets, it is important to know that US banks have avoided allowing customers to use crypto for retail transactions. Regarding the banking industry’s approach to digital currencies, the CEO of Bank of America, Brian Moynihan, told CNBC that if the regulators allow, the American banking industry would jump into crypto payments. Speaking on this stance, Moynihan stated:
“If you go down the street here and you go in and buy lunch, right, if you can pay with Visa, Mastercard, a debit card, Apple Pay, etc., this would just be another form of payment”
At the same time, Trump’s lighter regulatory approach is expected to reduce some of the burden on the banking industry imposed by Biden’s administration and is likely to spur dealmaking. Barclays senior equity analyst Jason Goldberg told Yahoo Finance that the environment is a ‘pro-growth, less regulation backdrop’ and favorable for increased loan growth and enhanced capital market activity among banks.
JPMorgan’s Mary Erdoes expressed optimism for deals in the banking industry under the new admin, saying:
“Companies don’t want to go public or can’t go public because of the heavy regulatory burden and hopefully you’ll see that [change]”
With increased mergers and acquisitions being anticipated in the United States under the new administration, CNBC mentioned European banking leaders hoping for more deal-making activity on the continent. The chief executive of the largest bank in the Netherlands, ING, is of the opinion that too many banks in Europe deem the sector inefficient. In comparison to the US, fragmented laws across Europe tend to prevent a more efficient banking system. Simultaneously, the chief executive of Swiss bank UBS, Sergio Ermotti, thinks the policy stance taken by regulators under Trump would encourage deal-making among several small and regional banks while he considers the US authorities unlikely to weaken regulations for larger banks.
Our Methodology
In order to compile a list of the 10 most undervalued bank stocks to invest in according to analysts, we first used a stock screener to shortlist bank stocks that are trading at a forward P/E of less than 15 and that analysts see at least 15% upside to. The 10 most undervalued bank stocks to invest in according to analysts have been arranged in ascending order of their average upside potential.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A bustling financial district with a towering bank building at its center.
Inter & Co, Inc. (NASDAQ:INTR)
Average Upside Potential: 48.45%
Forward P/E: 8.64
Inter & Co, Inc. (NASDAQ:INTR) offers various services including banking, investments, mortgages, credit, insurance, and cross-border payments. The company provides comprehensive financial and lifestyle solutions to serve the evolving needs of modern consumers. It was originally established as a traditional bank, transitioned into a digital bank in 2015, and expanded its offerings to include a financial super app.
Inter serves as the pioneering and differentiated financial super app offering financial and digital commerce services to millions of customers across the Americas. The company continues to improve its super app with new features and hyper-personalizes the client experience, driving more engagement and client deposits. The above efforts are translating into higher revenues for Inter & Co, Inc. (NASDAQ:INTR). The company closed its most recent quarter with a record net income of R$ 260 million.
The firm’s strong and growing base of clients is a core strength, evident from a consistent improvement in activation and engagement metrics leading to massive interactions within INTR’s ecosystem, for instance, in over 15 million log-ins per day and 18 million depositors. As of the third quarter of 2024, INTR boasted 34.9 million clients, with 1.1 million net new active clients, as well as an activation rate increase for the 7th consecutive quarter. The company’s business clients present a major growth opportunity with more than 2 million accounts and a growth rate of 18% year-over-year.
Overall, INTR ranks 2nd on our list of most undervalued bank stocks to invest in according to analysts. While we acknowledge the potential of INTR as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued AI stock that is more promising than INTR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.