Banco De Chile (BCH) continues to pressure its multi-year high at $66.20 after posting an awesome 43% earnings surprise in late April. Estimates have since been on the rise, with the next-year estimate now projecting bullish 28% growth.
Company Description
Banco de Chile, together with its subsidiaries, provides personal and business banking products and services in Chile and the United States. The bank was founded in 1893 and has a market cap of $8.58 billion.
First-Quarter Results
Banco de Chile stepped up and reported excellent Q1 results on April 29 that handily beat analyst expectations. Earnings for the period came in at $1.40, 47% ahead of the Zacks Consensus Estimate. In spite of a 14% earnings miss last quarter, the company still has an average earnings surprise of 15% over the last four quarters.
The solid quarter enabled Banco de Chile to pay out a really nice $3.50 dividend to shareholders.
Optimism From the Top
CFO Pedro Samhan sounded an optimistic tone on the quarter and the company’s outlook, saying that, “Our first quarter is promising. We will aim to consolidate our operating revenues’ trend (YoY increase of +25.7%), but we will keep a close eye on operating expenses, which have remained almost flat with respect to the 1Q09 (+1.1%).This is an area where we aim to continue improving. Furthermore, we will continue to strengthen our funding structure and capital indicators, which allow us to increase our competitiveness and solvency.”
Estimates Jump
It didn’t take long for analysts to follow suit, with the current year adding 50 cents to $4.73 and the next year adding 35 cents to $5.68, a bullish 20% growth projection.
Rising estimates have helped keep the valuation picture in check, with shares trading with a forward P/E of 13X, a pinch below its peers 14X. Its P/B of 2.9X is in value territory but ahead of its peer’s 1.97X
2-Year Chart
BCH has basically been on fire since bottoming out with the market in March of 2009, recently hitting a new multi-year high at $66.20 on the heels of the good quarter. Moving forward, the long-term trend line should provide support on any weakness, take a look below.
Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the new Zacks Momentum Trader Service. Zacks Investment Research
