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Banco Macro S.A. Upped to Strong Buy

Zacks Equity Research

On Feb 28, Zacks Investment Research upgraded Banco Macro S.A. (BMA) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Banco Macro has been witnessing rising earnings estimates on the back of strong fourth-quarter 2012 results. Moreover, this well-known foreign bank delivered average earnings surprise of 12.1% in the last 3 quarters.

Banco Macro reported fourth-quarter results on Feb 14. Earnings per ADS came in at $1.48, beating the Zacks Consensus Estimate of $1.25 by 18.4% and the prior-year quarter’s earnings of $1.37 by 8.0%.

Better-than-expected results were attributable to top-line growth, followed by improvement in the loan portfolio. However, higher administrative expenses attributable to elevated personnel expenses and increased other operating expenses acted as a dampener for the quarter.

As of Dec 31, 2012, the bank’s public sector assets to total assets ratio was 3.9%, higher than 2.4% in the prior-year quarter. Commercial loans growth was also driven by increase in pledges and mortgages loans.

The Zacks Consensus Estimate for 2013 increased 0.6% to $5.22 per share as 1 out of 4 estimates were revised higher over the last 30 days. For 2014, 1 of the 3 estimates moved north over the same time frame, lifting the Zacks Consensus Estimate by 4.9% to $5.53 per share.

Other Stocks to Consider

Foreign banks that are currently performing well include Banco Bilbao Vizcaya Argentaria, S.A. (BBVA), BBVA Banco Franc (BFR) and Shinhan Financial Group Company Limited (SHG). All these companies carry a Zacks Rank #1.

Read the Full Research Report on SHG

Read the Full Research Report on BBVA

Read the Full Research Report on BMA

Read the Full Research Report on BFR

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