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Banco Santander-Chile (NYSE:BSAC) stock gained 2.2% in Thursday mid-afternoon trading after Bank of America double-upgraded the lender to Buy from Underperform as analyst Ernesto Gabilondo believes “the worst is behind and earnings arepoised to inflect next quarter.”
In a note to clients, Gabilondo said he thinks lower interest rates will start to buoy net interest margins overall, in a move that should partially drive a robust recovery for BSAC in 2024-2025.
In recent years, he noted, the Latin American bank’s earnings and NIM have suffered from lower levels of inflation and a derivative hedge on higher rates.
But, with rates expected to decline further, NIM pressure should start to fade and ultimately help boost the stock price.
The Buy rating disagrees with the SA Quant system rating and the average sell-side analyst rating, both at Hold.
