Bank Mandiri Shares Seen Undervalued, with 21% Upside Potential
Main Takeaways
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JAKARTA, Investortrust.id — Shares of PT Bank Mandiri (Persero) Tbk, or BMRI, are trading below their estimated fair value and could rise as much as 21.6%, according to a valuation analysis using the price-to-earnings (P/E) ratio published on Investing.com in early August.
As of the latest update, BMRI shares are trading at Rp4,530 each, while fair value estimates range from Rp4,984 to Rp5,508. The analysis, based on comparable Southeast Asian financial institutions such as Bank Rakyat Indonesia (BBRI), Vietnam’s BIDV and VietinBank (CTG), as well as Bank Negara Indonesia (BBNI) and Military Bank (MBB) of Vietnam, found that BMRI’s current P/E ratio of 7.5 times lags behind the peer average of 9.2 to 14.9 times.
Bank Mandiri has a total of approximately 93.33 billion shares outstanding, translating to a market capitalization of Rp422.8 trillion.
In its valuation model, Investing.com provided three scenarios using selected P/E multiples: conservative (8.3x), base (8.7x), and optimistic (9.1x). Applying these multiples to Bank Mandiri’s last twelve months (LTM) net income of Rp56.27 trillion results in a fair value range of Rp4,983.75 to Rp5,508.36 per share. At the highest estimate, this suggests an upside potential of 21.6% over the current market price.
Beyond the attractive valuation, BMRI's fundamentals remain strong. Over the past five years, the bank has delivered a compound annual growth rate (CAGR) of 15.2% in net income, accelerating to 25.8% in the last three years. Its profit margins are also robust, with a five-year average net margin of 38.9%, and a recent 12-month margin of 40.9%.
Despite the currently conservative valuation, BMRI’s consistent financial performance and growth trajectory make it one of the more attractive banking stocks on the Indonesia Stock Exchange. For long-term investors seeking exposure to Indonesia’s financial sector, Bank Mandiri offers a compelling case for consideration.
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