Italian Banks: Go for growth; Intesa to OW
*INTESA – Upgrade to OW from EW. Raise PT to €3.70 from €3.10
*PMI (OW) Raise PT to €1.20 from €1.10
*UBI BANCA (OW) Lower PT to €9.20 from €9.50
*BMPS (EW) Raise PT to €1.70 from €1.60
*BANCO POPOLARE (EW) Raise PT to €14.80 from €14.20
*UNICREDIT (EW) Lower PT to €6.30 from €6.50
We upgrade Intesa Sanpaolo to Overweight on stronger revenue prospects: With interest rates expected to remain low for longer, we see fees as the main driver of revenue growth. We estimate that net interest margins will remain roughly stable, with little loan growth. We upgrade ISP to Overweight with a raised EUR3.7 price target, and maintain our Overweight rating on UBI and PMI, on the basis that these banks have the best revenue growth potential and solid capital positions. We remain Equal Weight on UCG, BP and MPS.