• If you are looking at Credicorp and wondering whether the current share price still reflects solid value, you are not alone. This article will walk through what the numbers actually say.
• The stock last closed at US$355.48, with returns of 1.7% over 7 days, a marginal 0.2% decline over 30 days, 24.1% year to date, 106.7% over 1 year and 183.7% over 5 years. This naturally raises questions about how much future upside or risk is already built in.
• Recent news coverage has focused on Credicorp's role in Latin American banking and its exposure to regional economic and regulatory trends. This helps frame how investors think about both growth potential and risk in the share price. These themes are front of mind for many shareholders as they weigh whether the recent strong multi year returns still line up with underlying fundamentals.
• On our framework, Credicorp scores a valuation score of 4 out of 6, suggesting it screens as undervalued on several checks. We will walk through those traditional valuation approaches next before finishing with a more comprehensive way to think about what the stock might be worth.

Approach 1: Credicorp Excess Returns Analysis

The Excess Returns model looks at how much profit Credicorp can generate on its equity above the return that shareholders require, then capitalises that surplus into an estimate of fair value per share.

For Credicorp, the model starts with a Book Value of US$483.00 per share and a Stable EPS of US$109.95 per share, based on weighted future Return on Equity estimates from 8 analysts. The Average Return on Equity is 19.94%, while the implied Cost of Equity is US$46.60 per share, which leaves an Excess Return of US$63.35 per share. Analysts also estimate a Stable Book Value of US$551.50 per share, based on input from 7 analysts.

Putting these assumptions together, the Excess Returns framework points to an intrinsic value of about US$539.03 per share. Compared with the recent share price of US$355.48, this corresponds to a discount of roughly 34.1%, which indicates that Credicorp screens as undervalued on this approach.

Result: UNDERVALUED

Our Excess Returns analysis suggests Credicorp is undervalued by 34.1%. Track this in your watchlist or portfolio, or discover 54 more high quality undervalued stocks.

Approach 2: Credicorp Price vs Earnings

For profitable companies like Credicorp, the P/E ratio is a widely used yardstick because it links what you pay directly to the earnings the business is currently generating. It is a quick way to see how many dollars investors are willing to pay for each dollar of earnings.

What counts as a “normal” or “fair” P/E depends on how the market views a company’s growth prospects and risk. Higher expected growth or lower perceived risk can justify a higher P/E, while slower growth or higher risk usually points to a lower multiple.

Credicorp is trading on a P/E of 13.68x. That sits above the Banks industry average of about 11.75x, but below the peer group average of 15.27x. Simply Wall St’s Fair Ratio for Credicorp is 14.56x. This is a proprietary estimate of what the P/E might look like once you factor in earnings growth, profit margins, industry, market cap and key risks.

This Fair Ratio is often more useful than a simple comparison with peers or the broad industry, because it is tailored to Credicorp’s own characteristics rather than a blunt group average. Since the Fair Ratio of 14.56x is higher than the current 13.68x, the P/E suggests the shares screen as undervalued on this metric.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your Credicorp Narrative

Earlier we mentioned that there is an even better way to understand valuation. Let us introduce you to Narratives, a simple tool on Simply Wall St’s Community page that lets you connect your view of Credicorp’s story to specific forecasts for revenue, earnings and margins. You can compare the Fair Value from that story to today’s price to help you decide whether the stock looks attractive or stretched, and then see that Fair Value update automatically when new earnings or news arrive. One investor might build a more cautious Credicorp Narrative around a Fair Value close to the analyst consensus of about US$334 per share, while another might build a more optimistic Narrative around the higher US$360 Fair Value, each using different assumptions about how Credicorp executes on digital growth and regional exposure.

For Credicorp however, we will make it really easy for you with previews of two leading Credicorp Narratives:

Each one ties a different fair value to a specific set of assumptions about growth, margins and risk. Skimming both can help you work out which set of expectations feels closer to your own view.

Fair Value: US$360.00

Implied discount vs this Fair Value: about 1.3% below the narrative fair value at the last close of US$355.48

Revenue growth assumption: 13.89% a year

• Assumes faster PEN revenue growth, with analysts modeling about 13.9% annual growth over the next three years and earnings eventually reaching PEN 9.2b by around 2028.
• Builds on rapid monetization of Yape, deeper financial inclusion and cross business use of data and AI to support higher fee income, loan growth and a lower efficiency ratio.
• Takes the view that a P/E of 13.3x on 2028 earnings is justified, which is higher than the current multiple and above the current US Banks industry P/E used in the narrative.

Fair Value: roughly US$334.34 equivalent based on the analysts updated model

Implied premium vs this Fair Value: about 6.3% above the narrative fair value at the last close of US$355.48

Revenue growth assumption: 13.22% a year

• Anchors on the analyst consensus that ties PEN revenue of about PEN 27.2b and PEN 8.1b of earnings by 2028 to a future P/E of 11.0x, close to where the stock is modeled today.
• Highlights execution and risk around heavy exposure to Peru, higher risk lending via Yape, rising competition from fintechs, ongoing digital investment costs and regulatory demands.
• Sees the current share price as close to the PEN 250.49 consensus target used in the model, which implies the stock is roughly fairly priced around this narrative.

Taken together, these Narratives show you the range of assumptions already baked into analyst fair values, from a slightly higher US$360 bull case to a US$334 consensus anchor. The key question for you is which story, and which set of earnings and P/E assumptions, you are more comfortable backing with your own capital.

Do you think there's more to the story for Credicorp? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.