Is BAP's Q3 2024 EPS decline a long-term concern?

**Credicorp Ltd.'s (BAP) Q3 2024 EPS decline may not be a long-term concern.** Here's why: 1. **Q3 2024 EPS Decline Context**: BAP's Q3 2024 EPS was not disclosed, but Q2 2024 EPS was $4.49, missing the consensus estimate of $4.64. This decline was due to higher revenues and a decrease in earnings, a common trend indicating operational efficiency rather than fundamental business issues. 2. **Institutional Investor Activity**: Institutional investors have shown interest and adjustments in their holdings. For example, the Manufacturers Life Insurance Company decreased its stake by 12.8% in the second quarter. This could be a strategic realignment rather than a reflection of long-term concerns. 3. **Stock Performance and Analyst Expectations**: Despite the EPS decline, BAP's stock reached a new 52-week high of $183.55, indicating market confidence. Analysts expect a year-over-year decline in earnings but higher revenues for the quarter ending June 2024. This suggests that while there may be short-term fluctuations, the company's financial performance is expected to improve. 4. **Digital Growth and Strategic Initiatives**: BAP has made significant progress in digital and innovation efforts, leading to increased digital customers and transactions. This strategic focus could bolster its long-term growth potential. 5. **Dividend and Dividend Yield**: BAP has increased its annual dividend, reflecting confidence in its earnings and a commitment to shareholders. The dividend yield of 3.8% is attractive, supporting the notion that the current EPS decline may not be a long-term concern. 6. **Earnings Call Highlights**: During the Q2 2024 earnings call, BAP highlighted strong ROE, increased NIM due to strategic loan repricing, and resumed loan growth. These positive points suggest that the EPS decline may be a temporary blip rather than a harbinger of long-term problems. In conclusion, while BAP's Q3 2024 EPS decline is a concern, it is important to consider the broader context of the company's strategic direction, stock performance, and analyst expectations. The company's digital growth, dividend commitment, and strategic initiatives provide a positive outlook that may mitigate the long-term impact of the EPS decline.