Last Update17 Oct 25
Analysts have reduced their price target for Grupo Supervielle from ARS 4,900 to ARS 2,000. They cite concerns over the recent electoral outcome and its potential to negatively impact the bank's fundamentals through increased funding costs and heightened uncertainty.
Analyst Commentary
Recent analyst revisions reflect both optimism and caution regarding Grupo Supervielle's outlook following the adjustment in price target. The macroeconomic environment is creating a mixed set of expectations, with analysts weighing the potential for future growth against the current challenges.
Bullish Takeaways
- Some analysts believe that the current valuation offers a more reasonable entry point for long-term investors because recent events are already largely priced in.
- Bullish analysts highlight that continued guidance updates from management may help restore investor confidence if macro conditions stabilize.
- The bank’s diverse franchise and prior resilience in volatile markets could provide a foundation for future growth once uncertainty abates.
Bearish Takeaways
- Bearish analysts point to the increased cost of funding, which could pressure net interest margins and weigh on profitability.
- There is significant concern that heightened uncertainty will dampen credit demand, further slowing growth prospects in the near term.
- The recent election outcome is viewed as a catalyst for a negative feedback loop in the banking sector and could override even the most recent guidance from Grupo Supervielle.
- Challenging macro challenges are expected to persist, leading to a more cautious stance and restrained upside potential for the stock.
Valuation Changes
- The Fair Value Estimate remains stable at ARS 2,165.50, with no notable change from previous analyses.
- The Discount Rate has risen slightly, moving from 29.85% to 29.88%.
- The Revenue Growth Projection has increased from 34.81% to 36.98%.
- The Net Profit Margin has edged down and is now at 18.33% compared to the previous 18.45%.
- The Future P/E Ratio is lower, decreasing from 6.09x to 5.85x.
Key Takeaways
- Digital banking innovation and cross-selling strategies are strengthening client engagement, diversifying revenue streams, and boosting operational efficiency.
- Stabilizing macroeconomic conditions and prudent financial management position the bank for sustainable growth, improved profitability, and greater resilience.
- Persistent macroeconomic and regulatory uncertainty, competitive pressures, and asset quality risks threaten Grupo Supervielle's revenue growth, profitability, and market position in Argentina.
Catalysts
About Grupo Supervielle- A financial services holding company, provides various banking products and services in Argentina.
- Anticipated post-election macroeconomic stabilization, with easing inflation, fiscal reform, and monetary policy relaxation, is expected to spur loan demand, drive economic growth, and support both top-line loan growth and higher net interest margins.
- Accelerating adoption of digital banking-including innovations like AI-powered WhatsApp channels, cluster-based remunerated accounts, and fully integrated online platforms (e.g., Tienda Supervielle)-enhances client engagement while reducing acquisition and servicing costs, directly boosting operational efficiency and potential net margins.
- Tangible progress on cross-selling between banking and brokerage units (especially leveraging InvertirOnline's large client base) offers a sizable opportunity to increase primary relationships, diversify revenue streams beyond traditional banking, and drive higher fee income.
- Structural shift toward a more credit-driven balance sheet, with prudent loan-to-deposit and leverage ratios, positions the bank to capture future growth as Argentina's credit penetration increases, impacting loan growth and supporting sustainable earnings expansion.
- Upside potential from regulatory changes (Basel III treatment), improved capital ratios, and industry consolidation could bolster capital strength, market share, and profitability, translating into higher return on equity and greater long-term earnings resilience.
Grupo Supervielle Future Earnings and Revenue Growth
Assumptions
How have these above catalysts been quantified?- Analysts are assuming Grupo Supervielle's revenue will grow by 35.7% annually over the next 3 years.
- Analysts assume that profit margins will increase from 6.2% today to 20.9% in 3 years time.
- Analysts expect earnings to reach ARS 392.4 billion (and earnings per share of ARS 914.28) by about September 2028, up from ARS 46.6 billion today.
- In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 10.9x on those 2028 earnings, down from 19.3x today. This future PE is lower than the current PE for the US Banks industry at 12.1x.
- Analysts expect the number of shares outstanding to remain consistent over the next 3 years.
- To value all of this in today's terms, we will use a discount rate of 29.62%, as per the Simply Wall St company report.
Grupo Supervielle Future Earnings Per Share Growth
Risks
What could happen that would invalidate this narrative?- Persistent high real interest rates and tightening monetary policy in Argentina are leading to funding scarcity-especially for peso deposits-and are constraining loan growth, which may weigh on revenue and net interest margins if the situation remains prolonged.
- Asset quality pressures are evident in the retail loan book, with rising NPLs (from 2% to 2.7%) and elevated cost of risk (guidance at 5–5.5%), making earnings more volatile and increasing provisions, which could negatively impact net income if macroeconomic normalization is slower than expected.
- Increasing competition from both established banks-potentially aided by industry consolidation-and the entry of neobanks and global fintechs into the Argentine market could erode Grupo Supervielle's market share and compress future fee and interest income, especially if digital initiatives fail to match new entrants' pace.
- Dependence on regulatory reforms and macroeconomic stabilization, particularly post-election and related to Basel III and FX liberalization, creates uncertainty; any delays or reversals could impact capital ratios, funding costs, and, ultimately, the company's ability to grow profitably.
- Structural challenges in the Argentine economy, such as low job creation and the potential for renewed economic or political instability, may stifle loan demand, increase credit risk, and cap sustainable growth in both revenue and profits over the long term.
Valuation
How have all the factors above been brought together to estimate a fair value?- The analysts have a consensus price target of ARS4475.5 for Grupo Supervielle based on their expectations of its future earnings growth, profit margins and other risk factors.
- In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be ARS1881.2 billion, earnings will come to ARS392.4 billion, and it would be trading on a PE ratio of 10.9x, assuming you use a discount rate of 29.6%.
- Given the current share price of ARS2055.0, the analyst price target of ARS4475.5 is 54.1% higher.
- We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.
How well do narratives help inform your perspective?
Disclaimer
AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.