Intercorp Financial Services (IFS): A Golden Entry Point in a Discounted Financial Leader

Intercorp Financial Services (IFS) stands at the intersection of compelling valuation, robust earnings momentum, and technical bullishness—a rare confluence that creates a once-in-a-cycle buying opportunity. With its stock trading at a fraction of its peers’ multiples and technical indicators signaling both strength and a pullback entry, investors can lock in gains before broader market recognition catches up.

Valuation: A Discounted Titan in a Pricy Sector

IFS’s valuation metrics scream underappreciated opportunity. Its Forward P/E of 7.60 is half the Financial Services sector’s average of 15.68 (as of Q1 2025). Similarly, its Price-to-Book ratio of 1.33 lags far behind the industry’s 3.18, and its Price-to-Cash Flow of 8.54 is 41% below the sector’s 14.51. These discounts are not anomalies: IFS’s P/E has consistently traded below its five-year median, even as its earnings surged 71% year-over-year to PEN490 million in Q4 2024.

This undervaluation is particularly striking given IFS’s superior asset quality. The company has maintained low non-performing loans (NPLs) and robust capital ratios, even as Peru’s pre-election uncertainty clouds macroeconomic stability. Strong earnings growth—driven by its dominant retail banking and microfinance divisions—further justify its valuation edge.

Earnings Momentum: Fueling the Bull Case

IFS’s financial performance is a blueprint for resilience. In Q4 2024:
- Net income jumped 71% YoY, outpacing peers like JPMorgan and Bank of America, which reported 9% and 1% growth, respectively.
- Return on Equity (18.2%) underscored efficient capital use, a stark contrast to the sector’s average of ~12%.
- Loan growth in key markets like Peru and Colombia remains robust, with IFS’s consumer loan book rebounding post-pandemic.

These metrics are no flash in the pan. Over the past decade, IFS has delivered 14% annualized EPS growth, a feat unmatched by most regional peers. Even with 2025’s macro challenges, management’s conservative guidance suggests a floor for profitability—not a ceiling.

Technicals: A Golden Cross and a Pullback Buying Signal

The charts paint a bullish picture. IFS’s stock has broken above its 50-day and 200-day moving averages, a golden cross signaling a sustained uptrend. As of May 13, the stock trades at $34.90, with the 200-day SMA at $28.68—a level it hasn’t breached since late 2023.

While the RSI at 61.28 is technically "overbought" (per some metrics), this is typical in strong trends. Historically, IFS has seen RSI pullbacks to 50-55 before resuming its climb—a $33.62 support level (just 3.6% below current prices) offers a high-probability entry. Traders should brace for a dip, using it to buy at a discount.

Why Act Now?

The stars are aligning for IFS:
1. Valuation Discount: A P/E half the sector’s average leaves room for multiple expansion.
2. Earnings Power: Sustained growth and asset quality insulate it from Peru’s political noise.
3. Technical Setup: A golden cross and a support-driven pullback create a risk/reward sweet spot.

The Bottom Line

Intercorp Financial Services is a sleeping giant waking up to its true worth. With valuation multiples at generational lows, earnings momentum firing on all cylinders, and technicals pointing skyward, this is a buy-and-hold opportunity. The $33.62 support level is your ticket to capitalizing on what could be one of 2025’s best-performing financial stocks.

Act now—before the crowd catches on.