This doesn’t tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context. CaixaBank’s earnings per share fell by 20% in the last twelve months. JP Morgan and Wells Fargo saw sharp declines on profits (-51% and -71% respectively) yesterday and I expect Spanish banks will be unable to avoid them too. Next CAIXABANK, S.A earnings date is February 3, the estimation is 0.08 EUR. So take a peek at this free list of interesting companies.
- There aren’t very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
- P/E ratios primarily reflect market expectations around earnings growth rates.
- To that end, you should be aware of the 3 warning signs we’ve spotted with CaixaBank .
- It is Spain’s third-largest lender by market value, after Banco Santander and BBVA.
CaixaBank trades on a P/E ratio of 7.6, which is below the ES market average of 15.9. The P/E reflects market pessimism that probably arises from the lack of recent EPS growth, paired with significant leverage. For those who prefer to invest with the flow of momentum, that might be a bad sign, but for deep value investors this stock might justify some research.
Third quarter earnings released
The dividends paid by the company have thusly boosted the total shareholder return. During three years of share price growth, CaixaBank achieved compound earnings per share growth of 12% per year. This EPS growth is lower than the 15% average annual increase in the share price. This suggests that, equiti broker as the business progressed over the last few years, it gained the confidence of market participants. That’s not necessarily surprising considering the three-year track record of earnings growth. Is worth €16b, and total annual CEO compensation was reported as €3.5m for the year to December 2018.
This begs the question – does CaixaBank understand the risks it has taken on? P/E ratios primarily reflect market expectations around earnings growth rates. That means unless the share price increases, the P/E will reduce in a few years. And as that P/E ratio drops, the company will look cheap, unless its share price increases. Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s nice to see a little revenue growth, as this is consistent with healthy business conditions.
A bad debt ratio of 6.12% is extremely high, considering most banks exhibit ratios lower than the appropriate threshold of 3%. This means CaixaBank shows poor bad debt management and is very much exposed to a higher chance of default. If you spot an error that warrants correction, please contact the editor at editorial- This article by Simply Wall St is general in nature. Simply Wall St has no position in the stocks mentioned.
While the market sentiment towards a stock is very changeable, in the long run, the share price will tend to move in the same direction as earnings per share. So, on certain occasions, long term focussed investors try to take advantage of pessimistic expectations to buy shares at a better aspyr media glassdoor price. Perhaps the simplest way to get a read on investors’ expectations of a business is to look at its Price to Earnings Ratio . A high P/E ratio means that investors have a high expectation about future growth, while a low P/E ratio means they have low expectations about future growth.
Could help you form your own view on if that will happen. CaixaBank, S.A., together with its subsidiaries, provides various banking products and financial services in Spain and internationally. The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-
The technical figure Triangle can be found in the daily chart of the Spanish company CaixaBank, S.A. (CABK.mc). CaixaBank, S.A., is a Spanish multinational financial services company. It is Spain’s third-largest lender by market value, after Banco Santander and BBVA. CaixaBank has 5,397 branches to serve its 15.8 million customers, and has the most extensive… The company’s earnings per share is depicted in the image below .
It could be important to check this free visual depiction of what analysts expect for the future. Investors have an opportunity when market expectations about a stock are wrong. As value investor Benjamin Graham famously said, ‘In the short run, the market is a voting machine but in the long run, it is a weighing machine. So this free visual report on analyst forecasts could hold the key to an excellent investment decision. The ‘Price’ in P/E reflects the market capitalization of the company.
While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at €1.3m. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. When we examined a group of companies with market caps over €7.2b, we found that their median CEO total compensation was €3.5m. There nordfx minimum deposit aren’t very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure. CaixaBank’s understanding of its risk level can be estimated by its ability to forecast and provision for its bad loans. The bank has poorly anticipated the factors contributing to higher bad loan levels if it writes off more than 100% of the bad debt it provisioned for.
It therefore might be upsetting for shareholders if the CEO were paid generously. You can see, below, how CEO compensation at CaixaBank has changed over time. While growth expenditure doesn’t always pay off, the point is that it is a good option to have; but one that the P/E ratio ignores. CABK exceeded the Spanish Banks industry which returned -8.2% over the past year. European Banking scenario is quite unstable and untrusted. If the crisis situation on the EU zone wasn’t enough add breixt to that.
To that end, you should be aware of the 3 warning signs we’ve spotted with CaixaBank . One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share with the share price. CaixaBank is seen as engaging in imprudent risky lending practices if bad loans make up more than 3% of its total loans. Loans that are “bad” cannot be recovered by the bank and are written off as expenses which comes out directly from its profit.
We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Assuming nothing else has changed, a lower share price makes a stock more attractive to potential buyers.
CaixaBank’s (BME:CABK) three-year earnings growth trails the 17% YoY shareholder returns
It is important to consider the total shareholder return, as well as the share price return, for any given stock. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. We note that for CaixaBank the TSR over the last 3 years was 59%, which is better than the share price return mentioned above.
Note that our analysis does not factor in the latest price-sensitive company announcements. We aim to bring you long-term focused research analysis driven by fundamental data. It’s good to see that CaixaBank has rewarded shareholders with a total shareholder return of 46% in the last twelve months. Notably the five-year annualised TSR loss of 0.7% per year compares very unfavourably with the recent share price performance. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a inflection point within the business. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important.
Remuneration for Gonzalo Gortázar Rotaeche is close enough to the median pay for a CEO of a large company . Since shareholders would have lost about 19% over three years, some CaixaBank, S.A. Shareholders would surely be feeling negative emotions.
As you can see below CaixaBank has a P/E ratio that is fairly close for the average for the banks industry, which is 7.5. It has been clearly oversold up until Fibonacci retracement level 0.5. Do not expect a trend change if tomorrow’s results are better than expected.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings. So Gonzalo Gortázar Rotaeche is paid around the average of the companies we looked at.
This bank Caixabank is actually catalan bank, where and independency process is taking place. If that will take place in fact is somethong nobody know right now.
CaixaBank has net debt worth a very significant 205% of its market capitalization. This is a relatively high level of debt, so the stock probably deserves a relatively low P/E ratio. Keep that in mind when comparing it to other companies. Its P/E ratio suggests that CaixaBank shareholders think that in the future it will perform about the same as other companies in its industry classification. The company could surprise by performing better than average, in the future.