Trade the Mediobanca share!

Analysis before buying or selling Mediobanca shares

Trade the Mediobanca share!
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We are going to present you the Mediobanca share, with its main characteristics, the activities of this company and a historical technical analysis of its price for the last years.

Elements to consider before selling or buying Mediobanca shares

Analysis N°1

The various operations of acquisition of subsidiaries or creation of subsidiaries by the group with the aim of diversifying its offer of products and services on the Italian market are also often interesting signals of increase to be taken into account since they enable it to reach a wider clientele.

Analysis N°2

It is important to keep an eye on the rather unfavourable economic conditions in Italy over the last few years, which have naturally had a negative impact on this group's activities.

Analysis N°3

The tax increases resulting from the growth of the Italian public debt must be followed.

Analysis N°4

The very strong competition in this market should also be taken into account.

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General presentation of Mediobanca

The Mediobanca group is currently one of the leaders in the Italian banking sector. Its activity can be divided into four main sectors: investment banking, corporate and market banking, private banking, retail banking and portfolio management.

This banking group currently manages no less than 16 billion euros of outstanding deposits and more than 36 billion euros of outstanding loans.

Mediobanca's share price is currently quoted on the FTSE MIB stock market index.

Analysis before buying or selling Mediobanca shares
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Positive factors for Mediobanca shares
The factors in favour of a rise in the Mediobanca share price:

A precise comparison of the strengths and weaknesses of the Mediobanca Group will allow you to deduce the main advantages and disadvantages of this stock in your analysis. We therefore propose that you discover here what the strengths and weaknesses of this company in the banking sector are today.

Let's start our overview with a summary of the main assets that this group has today and that could enable it to sustain its growth in the years to come:

  • First of all, it should be noted that the group's capital is in line with the legal standards and rules in force in Europe, which gives it a certain stability and confidence on the part of rating agencies and investors. The solvency agreements are in favour of this Italian bank, which manages to meet their requirements effectively.
  • In recent years, the Mediobanca Group has also achieved the strategic feat of diversifying its activities and sources of income from segments other than interest income. In fact, the sale of products and services that are additional and complementary to its historical activities is on the rise, reducing its exposure to a single segment and bringing it greater profitability.
  • The group's yields have also been higher in recent years, which is also a strong point. Moreover, the financial results have been fairly balanced over the last decade, which is an element that may reassure some investors and the group's shareholders about the bank's solidity.
  • Finally, another undeniable asset of this Italian group is its international expansion strategy. Indeed, Mediobanca envisages capital flows to developing countries in the next few years, which would also enable it to diversify its revenues.
Negative factors for Mediobanca shares
The factors in favour of a drop in the Mediobanca share price:

Now that you have discovered the main advantages and strengths that the Mediobanca Group has to face the competition and the challenges of this market, we suggest you learn more about its weaknesses and major drawbacks.

  • Firstly, it should be pointed out that the group's portfolio of concentrated loans is still relatively large, which also represents a significant solvency risk, especially in the event of a major economic crisis. Indeed, with extremely low interest rates and significant socio-economic risks, the cost of risk on outstanding loans is increasingly weighing on European banks, and particularly on Italian banks.
  • Although the group is implementing a strategy of internationalisation of its activities, it is also regrettable that its assets are still highly concentrated geographically, with a large part still in Italy and the rest mainly in Europe. This of course represents a risk due to the concentration of exposure to a single economy, whereas the group's major competitors are more established internationally.
  • Still on the subject of Mediobanca's major weaknesses, it may also be pointed out here that the group is particularly sensitive to the sovereign debt crisis which is still weighing on the banking sector in Italy. The recent crisis linked to the Covid epidemic has further weakened this sector, making companies like Mediobanca, which were already weak, more vulnerable.
  • Another major flaw or rather, a major threat for this group concerns, of course, the competition in this sector of activity since it is increasingly aggressive and numerous with, in particular, the large Italian banks which are vying with ingenuity to take market shares, but also some foreign players who are trying to establish themselves in the country.
  • Finally, the last major disadvantage from which the Mediobanca group could suffer, and therefore one of its main weaknesses, concerns global economic imbalances. These have tended to increase over time, particularly in recent years, and this could be detrimental to the bank, which is still heavily concentrated on the Italian market.

As we have just seen, the Italian banking group Mediobanca has almost as many strengths as weaknesses. It is therefore imperative to also compare the weight of each of these elements in the image that this stock will send to investors. Moreover, these elements will of course evolve over time and you must therefore systematically question them and re-evaluate their veracity according to the current market conditions in this sector and the news, results and major events that may affect this group directly or indirectly. A complete fundamental analysis should therefore be carried out before any strategic decision is made.

The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions or a solicitation to buy or sell an asset.

Frequently Asked Questions

When was the Mediobanca Group created?

Mediobanca was created in 1946 with the aim of facilitating the reconstruction of Italy and its economy after the Second World War. At the time, it specialised in medium-term loans and later expanded its activities to include leasing, factoring and consumer credit, followed by real estate lending and asset management. It thus became one of the leading investment banks in Italy and quickly positioned itself on the international market.

How has Mediobanca's share price evolved historically?

The historical analysis of the Mediobanca share price will help you set up a long-term trading strategy on this stock. We know that over the last fifteen years, this stock has fallen by 55.98%. Over the last 5 years, it has lost nearly 27.80%. Over the last three years, the stock has fallen by 21.65% and over the last year, it has fallen by 25.48%. The underlying trend for this stock is therefore generally downward.

How do you analyse the Mediobanca share?

In order to perform a Mediobanca share price analysis that will give you trading signals, you must first and foremost think about coupling the results of technical analysis with those of fundamental analysis. In this way, you can use the past movements of this stock as well as the news and important events of this company to better anticipate its future movements.

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