Intercorp Financial Services (BVL:IFS) - Share price, News & Analysis

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

IFS ($25.21) is trading below our estimate of [[fair value]] ($32.3)

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

IFS Stock Overview

Intercorp Financial Services Inc. provides banking, insurance, and wealth management services for retail and commercial clients in Peru.

Rewards

Trading at 22% below our estimate of its fair value

Revenue is forecast to grow 11.32% per year

Earnings have grown 6.5% per year over the past 5 years

Risk Analysis

High level of non-cash earnings

Unstable dividend track record

Intercorp Financial Services Competitors

Banco BBVA Perú

BVL:BBVAC1

S/11.4b

Scotiabank PerúA

BVL:SCOTIAC1

S/15.3b

Banco de Crédito del Perú

BVL:CREDITC1

S/34.1b

Mibanco Banco de la Microempresa

BVL:MIBANC1

S/3.7b

Price History & Performance

Summary of all time highs, changes and price drops for Intercorp Financial Services
Historical stock prices
Current Share Price	US$25.21
52 Week High	US$36.50
52 Week Low	US$18.34
Beta	0.99
1 Month Change	12.85%
3 Month Change	-4.65%
1 Year Change	27.32%
3 Year Change	-37.75%
5 Year Change	-25.63%
Change since IPO	63.70%

Shareholder Returns

	IFS	PE Banks	PE Market
7D	5.0%	3.1%	2.5%
1Y	27.3%	14.0%	24.9%

Return vs Industry: IFS exceeded the PE Banks industry which returned 12.9% over the past year.

Return vs Market: IFS exceeded the PE Market which returned 24.4% over the past year.

Price Volatility

Is IFS's price volatile compared to industry and market?
IFS volatility
IFS Average Weekly Movement	4.9%
Banks Industry Average Movement	4.1%
Market Average Movement	3.9%
10% most volatile stocks in PE Market	7.3%
10% least volatile stocks in PE Market	1.8%

Stable Share Price: IFS is not significantly more volatile than the rest of PE stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: IFS's weekly volatility (5%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1897	7,378	Luis Felipe Castellanos Lopez-Torres	https://www.ifs.com.pe

Intercorp Financial Services Inc. provides banking, insurance, and wealth management services for retail and commercial clients in Peru. The company operates through three segments: Banking, Insurance, and Wealth Management. It provides transactional accounts, such as cuenta sueldo and cuenta simple; savings accounts; investment accounts; and time deposits, certificates of deposit, and compensation for service time accounts.

Intercorp Financial Services Fundamentals Summary

How do Intercorp Financial Services's earnings and revenue compare to its market cap?
IFS fundamental statistics
Market Cap	S/11.21b
Earnings (TTM)	S/1.66b
Revenue (TTM)	S/4.62b

6.7x

P/E Ratio

1.2x

P/B Ratio

Is IFS overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
IFS income statement (TTM)
Revenue	S/4.62b
Cost of Revenue	S/0
Gross Profit	S/4.62b
Other Expenses	S/2.96b
Earnings	S/1.66b

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

Aug 15, 2022

Earnings per share (EPS)	14.42
Gross Margin	100.00%
Net Profit Margin	36.03%
Debt/Equity Ratio	174.2%

How did IFS perform over the long term?

See historical performance and comparison

Dividends

6.6%

Current Dividend Yield

48%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

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

Valuation Score

5/6

Valuation Score 5/6

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 IFS?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for IFS. This is calculated by dividing IFS's market cap by their current preferred multiple.
What is IFS's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	S/11.21b

IFS 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	0.9x

Price to Earnings Ratio vs Peers

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

IFS PE Ratio vs Peers

The above table shows the PE ratio for IFS vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	9.1x
BBVAC1 Banco BBVA Perú	6.4x	n/a	S/11.4b
SCOTIAC1 Scotiabank PerúA	12x	n/a	S/15.3b
CREDITC1 Banco de Crédito del Perú	8.5x	n/a	S/34.1b
MIBANC1 Mibanco Banco de la Microempresa	9.6x	n/a	S/3.7b
IFS Intercorp Financial Services	6.7x	7.3%	US$2.9b

Price-To-Earnings vs Peers: IFS is good value based on its Price-To-Earnings Ratio (6.7x) compared to the peer average (9.1x).

Price to Earnings Ratio vs Industry

How does IFS's PE Ratio compare vs other companies in the South American Banks Industry?

Price-To-Earnings vs Industry: IFS is good value based on its Price-To-Earnings Ratio (6.7x) compared to the PE Banks industry average (9.8x)

Price to Earnings Ratio vs Fair Ratio

What is IFS'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.

IFS PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	6.7x
Fair PE Ratio	n/a

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

Share Price vs Fair Value

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

Below Fair Value: IFS ($25.21) is trading below our estimate of fair value ($32.3)

Significantly Below Fair Value: IFS 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 and analysts are within a statistically confident range of agreement.

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Future Growth

How is Intercorp Financial Services forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

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

7.3%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: IFS's forecast earnings growth (7.3% per year) is below the savings rate (7.7%).

Earnings vs Market: IFS's earnings (7.3% per year) are forecast to grow slower than the PE market (8.8% per year).

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

Revenue vs Market: IFS's revenue (11.3% per year) is forecast to grow faster than the PE market (2.4% per year).

High Growth Revenue: IFS's revenue (11.3% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: IFS's Return on Equity is forecast to be low in 3 years time (16.5%).

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Past Performance

How has Intercorp Financial Services performed over the past 5 years?

Past Performance Score

3/6

Past Performance Score 3/6

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

6.5%

Historical annual earnings growth

Earnings and Revenue History

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

Growing Profit Margin: IFS's current net profit margins (36%) are higher than last year (29%).

Past Earnings Growth Analysis

Earnings Trend: IFS's earnings have grown by 6.5% per year over the past 5 years.

Accelerating Growth: IFS's earnings growth over the past year (117.3%) exceeds its 5-year average (6.5% per year).

Earnings vs Industry: IFS earnings growth over the past year (117.3%) underperformed the Banks industry 265.3%.

Return on Equity

High ROE: IFS's Return on Equity (18.6%) is considered low.

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Financial Health

How is Intercorp Financial Services'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: IFS's Assets to Equity ratio (9.5x) is low.

Allowance for Bad Loans: IFS has a sufficient allowance for bad loans (153%).

Low Risk Liabilities: 61% of IFS's liabilities are made up of primarily low risk sources of funding.

Loan Level: IFS has an appropriate level of Loans to Assets ratio (49%).

Low Risk Deposits: IFS's Loans to Deposits ratio (91%) is appropriate.

Level of Bad Loans: IFS has a high level of bad loans (3%).

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Dividend

What is Intercorp Financial Services's current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

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

6.57%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: IFS's dividend (6.57%) is higher than the bottom 25% of dividend payers in the PE market (6.38%).

High Dividend: IFS's dividend (6.57%) is low compared to the top 25% of dividend payers in the PE market (25.21%).

Stability and Growth of Payments

Stable Dividend: IFS has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: IFS's dividend payments have increased, but the company has only paid a dividend for 6 years.

Current Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (48.4%), IFS's dividend payments are well covered by earnings.

Future Payout to Shareholders

Future Dividend Coverage: IFS's dividends in 3 years are forecast to be well covered by earnings (46.6% payout ratio).

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Management

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

8.1yrs

Average management tenure

CEO

Luis Felipe Castellanos Lopez-Torres (52 yo)

9.33yrs

Tenure

Lord Luis Felipe Castellanos Lopez Torres serves as a Director of Excelsa Acquisition Corp. He serves as Chief Executive Officer at Banco Internacional del Perú SAA -Interbank (formerly known as Banco Int...

Leadership Team

Experienced Management: IFS's management team is seasoned and experienced (8.1 years average tenure).

Board Members

Experienced Board: IFS's board of directors are considered experienced (3.3 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	2022/08/15 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31