OTP Bank Nyrt (BUSE:OTP) - Share price, News & Analysis

Q: What is the Fair Price of OTP when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

OTP (HUF9212) is trading below our estimate of [[fair value]] (HUF23341.14)

OTP fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	3/6
Past Performance	1/6
Financial Health	5/6
Dividends	5/6

OTP Stock Overview

Rewards

Trading at 60.5% below our estimate of its fair value

Earnings are forecast to grow 19.45% per year

Pays a reliable dividend of 4.67%

Risk Analysis

High level of non-cash earnings

Profit margins (21.8%) are lower than last year (32%)

OTP Bank Nyrt Competitors

Woori Financial Group

KOSE:A316140

₩8.8t

SinoPac Financial Holdings

TWSE:2890

NT$196.4b

Bank of Ireland Group

ISE:BIRG

€6.4b

Israel Discount Bank

TASE:DSCT

₪25.3b

Price History & Performance

Summary of all time highs, changes and price drops for OTP Bank Nyrt
Historical stock prices
Current Share Price	Ft9,212.00
52 Week High	Ft19,590.00
52 Week Low	Ft7,738.00
Beta	0.99
1 Month Change	13.39%
3 Month Change	-14.51%
1 Year Change	-47.42%
3 Year Change	-24.80%
5 Year Change	-10.87%
Change since IPO	8,673.33%

Shareholder Returns

	OTP	HU Banks	HU Market
7D	3.3%	1.7%	1.8%
1Y	-47.4%	-11.0%	-24.6%

Return vs Industry: OTP underperformed the Hungarian Banks industry which returned -11.9% over the past year.

Return vs Market: OTP underperformed the Hungarian Market which returned -23.2% over the past year.

Price Volatility

Is OTP's price volatile compared to industry and market?
OTP volatility
OTP Average Weekly Movement	6.1%
Banks Industry Average Movement	4.2%
Market Average Movement	4.6%
10% most volatile stocks in HU Market	8.7%
10% least volatile stocks in HU Market	2.9%

Stable Share Price: OTP is not significantly more volatile than the rest of Hungarian stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: OTP's weekly volatility (6%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1949	35,370	Sandor Csanyi	https://www.otpbank.hu

OTP Bank Nyrt., together with its subsidiaries, provides commercial banking services to retail clients, corporations and agricultural enterprises, and private and institutional investors in Hungary and internationally. It offers current, foreign currency, securities, long term investment, and retirement savings accounts; bank and business cards; agricultural, mortgage, and housing loans, as well as overdraft facilities; and invests in government and fixed income bonds, mutual funds, mortgages, shares, and certificates, stock exchange transaction orders, investment fund shares, and government securities. The company also provides cash management services, such as domestic and international transfers, batch payments, liquidity and savings management, and financing; real estate development, leasing, and management services; wealth planning, commercial factoring, refinancing, finance lease, housing savings, fund management, and e-services; and Internet, mobile phone, SMS, telephone, and private banking services.

OTP Bank Nyrt Fundamentals Summary

How do OTP Bank Nyrt's earnings and revenue compare to its market cap?
OTP fundamental statistics
Market Cap	Ft2.58t
Earnings (TTM)	Ft282.87b
Revenue (TTM)	Ft1.30t

9.1x

P/E Ratio

0.8x

P/B Ratio

Is OTP overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
OTP income statement (TTM)
Revenue	Ft1.30t
Cost of Revenue	Ft0
Gross Profit	Ft1.30t
Other Expenses	Ft1.01t
Earnings	Ft282.87b

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

Nov 04, 2022

Earnings per share (EPS)	1.01k
Gross Margin	100.00%
Net Profit Margin	21.81%
Debt/Equity Ratio	98.9%

How did OTP perform over the long term?

See historical performance and comparison

Dividends

4.7%

Current Dividend Yield

43%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is OTP undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for OTP?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for OTP. This is calculated by dividing OTP's market cap by their current preferred multiple.
What is OTP's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	Ft2.58t

OTP key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	n/a
Enterprise Value/EBITDA	n/a
PEG Ratio	0.5x

Price to Earnings Ratio vs Peers

How does OTP's PE Ratio compare to its peers?

OTP PE Ratio vs Peers

The above table shows the PE ratio for OTP vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	7.8x
A316140 Woori Financial Group	3.3x	2.6%	₩8.8t
2890 SinoPac Financial Holdings	12.1x	11.0%	NT$196.4b
BIRG Bank of Ireland Group	6.9x	20.9%	€6.4b
DSCT Israel Discount Bank	8.7x	4.2%	₪25.3b
OTP OTP Bank Nyrt	9.1x	19.5%	Ft2.6t

Price-To-Earnings vs Peers: OTP is expensive based on its Price-To-Earnings Ratio (9.1x) compared to the peer average (7.8x).

Price to Earnings Ratio vs Industry

How does OTP's PE Ratio compare vs other companies in the European Banks Industry?

Price-To-Earnings vs Industry: OTP is expensive based on its Price-To-Earnings Ratio (9.1x) compared to the European Banks industry average (8.7x)

Price to Earnings Ratio vs Fair Ratio

What is OTP's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

OTP PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	9.1x
Fair PE Ratio	n/a

Price-To-Earnings vs Fair Ratio: Insufficient data to calculate OTP's Price-To-Earnings Fair Ratio for valuation analysis.

Share Price vs Fair Value

What is the Fair Price of OTP when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: OTP (HUF9212) is trading below our estimate of fair value (HUF23341.14)

Significantly Below Fair Value: OTP is trading below fair value by more than 20%.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price, but analysts are not within a statistically confident range of agreement.

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Future Growth

How is OTP Bank Nyrt forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?

Future Growth Score

3/6

Future Growth Score 3/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

19.5%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: OTP's forecast earnings growth (19.5% per year) is above the savings rate (1.1%).

Earnings vs Market: OTP's earnings (19.5% per year) are forecast to grow faster than the Hungarian market (9.6% per year).

High Growth Earnings: OTP's earnings are forecast to grow, but not significantly.

Revenue vs Market: OTP's revenue (5.1% per year) is forecast to grow faster than the Hungarian market (1.5% per year).

High Growth Revenue: OTP's revenue (5.1% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: OTP's Return on Equity is forecast to be low in 3 years time (14.1%).

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Past Performance

How has OTP Bank Nyrt performed over the past 5 years?

Past Performance Score

1/6

Past Performance Score 1/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

6.0%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: OTP has a high level of non-cash earnings.

Growing Profit Margin: OTP's current net profit margins (21.8%) are lower than last year (32%).

Past Earnings Growth Analysis

Earnings Trend: OTP's earnings have grown by 6% per year over the past 5 years.

Accelerating Growth: OTP's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: OTP had negative earnings growth (-27.7%) over the past year, making it difficult to compare to the Banks industry average (29.4%).

Return on Equity

High ROE: OTP's Return on Equity (8.9%) is considered low.

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Financial Health

How is OTP Bank Nyrt's financial position? (This company is analysed differently as a bank or financial institution)

Financial Health Score

5/6

Financial Health Score 5/6

Asset Level
Allowance for Bad Loans
Low Risk Liabilities
Loan Level
Low Risk Deposits
Level of Bad Loans

Financial Position Analysis

Debt to Equity History and Analysis

Balance Sheet

Financial Institutions Analysis

Asset Level: OTP's Assets to Equity ratio (9.7x) is low.

Allowance for Bad Loans: OTP has a sufficient allowance for bad loans (166%).

Low Risk Liabilities: 85% of OTP's liabilities are made up of primarily low risk sources of funding.

Loan Level: OTP has an appropriate level of Loans to Assets ratio (58%).

Low Risk Deposits: OTP's Loans to Deposits ratio (76%) is appropriate.

Level of Bad Loans: OTP has a high level of bad loans (3.5%).

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Dividend

What is OTP Bank Nyrt current dividend yield, its reliability and sustainability?

Dividend Score

5/6

Dividend Score 5/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

4.67%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: OTP's dividend (4.67%) is higher than the bottom 25% of dividend payers in the Hungarian market (3.3%).

High Dividend: OTP's dividend (4.67%) is low compared to the top 25% of dividend payers in the Hungarian market (6.01%).

Stability and Growth of Payments

Stable Dividend: OTP's dividends per share have been stable in the past 10 years.

Growing Dividend: OTP's dividend payments have increased over the past 10 years.

Current Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (42.5%), OTP's dividend payments are well covered by earnings.

Future Payout to Shareholders

Future Dividend Coverage: OTP's dividends in 3 years are forecast to be well covered by earnings (26.4% payout ratio).

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Management

How experienced are the management team and are they aligned to shareholders interests?

13.1yrs

Average management tenure

CEO

Sandor Csanyi (70 yo)

30.25yrs

Tenure

Ft9,720,000

Compensation

Dr. S ndor Cs nyi serves as Managing Director of Group Governance Directorate at OTP Bank Nyrt.since October 2021. He has been the Chief Executive Officer and Chairman of the Board at OTP Bank Nyrt. since...

Leadership Team

Experienced Management: OTP's management team is seasoned and experienced (13.1 years average tenure).

Board Members

Experienced Board: OTP's board of directors are seasoned and experienced ( 10.3 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/08/16 00:00
End of Day Share Price	2022/08/16 00:00
Earnings	2022/06/30
Annual Earnings	2021/12/31