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Banco Macro S.A. Upped to Strong Buy

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On Feb 28, Zacks Investment Research upgraded Banco Macro S.A. (BMA - Free Report) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Banco Macro has been witnessing rising earnings estimates on the back of strong fourth-quarter 2012 results. Moreover, this well-known foreign bank delivered average earnings surprise of 12.1% in the last 3 quarters.

Banco Macro reported fourth-quarter results on Feb 14. Earnings per ADS came in at $1.48, beating the Zacks Consensus Estimate of $1.25 by 18.4% and the prior-year quarter’s earnings of $1.37 by 8.0%.

Better-than-expected results were attributable to top-line growth, followed by improvement in the loan portfolio. However, higher administrative expenses attributable to elevated personnel expenses and increased other operating expenses acted as a dampener for the quarter.

As of Dec 31, 2012, the bank’s public sector assets to total assets ratio was 3.9%, higher than 2.4% in the prior-year quarter. Commercial loans growth was also driven by increase in pledges and mortgages loans.

The Zacks Consensus Estimate for 2013 increased 0.6% to $5.22 per share as 1 out of 4 estimates were revised higher over the last 30 days. For 2014, 1 of the 3 estimates moved north over the same time frame, lifting the Zacks Consensus Estimate by 4.9% to $5.53 per share.

Other Stocks to Consider

Foreign banks that are currently performing well include Banco Bilbao Vizcaya Argentaria, S.A. (BBVA - Free Report) , BBVA Banco Franc (BFR - Free Report) and Shinhan Financial Group Company Limited (SHG - Free Report) . All these companies carry a Zacks Rank #1.

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