We recently published a list of 12 Best Italian Stocks to Buy in 2025. In this article, we are going to take a look at where Banca Mediolanum S.p.A. (OTC:BNCDY) stands against other best Italian stocks to buy in 2025.
As per Deloitte, the broader Italian economy slowed down in 2024, with moderate growth. The service sector expansion was contrasted with continued weakness in essentially all other sectors, mainly in manufacturing and automotive. The consumer and business sentiments in Italy were low across 2024, in the context of weakness in the critical economies of the euro area too.
On the supply side, the broader GDP growth was only supported by the services sector in 2024, while essentially all other sectors witnessed a decline. With these impacts now behind us, what lies ahead for the broader Italian economy?
Inflation Is Expected to Remain Moderate, Says Deloitte
In Italy, inflation slowed down in 2024 and remained the lowest for well-established European economies, added Deloitte. That being said, electricity and gas prices were higher in Italy in comparison to other large European economies including France and Germany, influencing the competitiveness of Italian companies. In 2025, Deloitte sees inflation to remain below the levels expected in the euro area and the ECB target of 2%.
Therefore, moderate inflation, along with nominal wage growth, can result in a gradual recovery in real wages. In general, the broader Italian labor market witnessed a contraction last year. Notably, while the number of employed people continues to increase, hours worked have witnessed a decline, primarily in the industrial sector. Deloitte believes that the broader Italian economy will maintain moderate positive growth in 2025, mainly in line with the anticipated average for euro-area economies. While it can face slightly higher consumer inflation, the levels will be lower than the euro area average. BNP Paribas believes that Italy still has the second lowest inflation in the Eurozone after Ireland. However, as elsewhere, inflation increased in January because of less energy deflation.
As per Allianz Trade, Italy witnessed a strong recovery from the pandemic and was one of the best performers among the 4 major Eurozone economies. Even though GDP is now 5.6% above pre-pandemic levels, the broader economic activity witnessed a slowdown in recent quarters. It even stagnated (in real quarterly terms) in Q3 2024. However, private consumption growth resumed in 2024, with confidence recovering alongside the strong decline of inflation.
Moving forward, Allianz Trade sees private consumption picking up due to a recovery in income and an easing of monetary policy. Notably, a catch-up in NGEU spending is expected to make up for the partial recovery of investment activity. In 2025, the firm anticipates GDP to expand by 0.8%, followed by 1% in the following year.
Our Methodology
To list the 12 Best Italian Stocks to Buy in 2025, we used a screener and sifted through several online rankings. Next, we chose the companies having headquarters in Italy and in which analysts saw upside potential. Finally, the stocks were arranged in ascending order of their average upside potential, as of February 10. We also mentioned hedge fund sentiments from Insider Monkey’s database of 900 elite hedge funds, as of Q3 2024.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Is Banca Mediolanum S.p.A. (BNCDY) the Best Italian Stock to Buy in 2025?
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Banca Mediolanum S.p.A. (OTC:BNCDY)
Number of Hedge Fund Holders: N/A
Average Upside Potential: ~9.7%
Headquartered in Basiglio, Italy, Banca Mediolanum S.p.A. (OTC:BNCDY) offers various banking products and services in Italy. In FY 2024, the company saw double-digit YoY growth in net commission income to €1,168.0 million as a result of strong managed asset inflows & positive markets throughout all asset classes. Its operating margin saw an increase of ~11%, driven by diversification, profitability & scalability of the business model. Banca Mediolanum S.p.A. (OTC:BNCDY) saw total net inflows of €10.44 billion, reflecting an increase of 46% YoY. This was aided by the growth of the customer base due to promotional initiatives, and the quality of investment services offered.
Notably, strong acceleration of flows, primarily fixed-income and IIS money market funds, resulted in the growth of 91% YoY to €7.64 billion in FY 2024 in the “net inflows into managed assets” category. Banca Mediolanum S.p.A. (OTC:BNCDY)’s growth prospects in 2025 are aided by a strong capital position, leaving plenty of room for both organic growth & shareholder remuneration. Banca Mediolanum S.p.A. (OTC:BNCDY) expects further CET1 strengthening in the expectation of implementation of final terms of Basel III in 2025.
Overall, BNCDY ranks 9th on our list of best Italian stocks to buy in 2025. While we acknowledge the potential of BNCDY as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than BNCDY but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
