Argentina's Banco Macro (NYSE:BMA) has already had a pretty solid year, with the shares up 26% over the last 12 months on improving prospects for Argentina's economy. In fact, Banco Macro has been something of a standout, as Galicia (NASDAQ:GGAL) has climbed about 15% and BBVA Francs (NYSE:BFR) has fallen more than 15% over the same time period. Even so, better things could still be ahead.
Banco Macro is the third-largest private bank in Argentina and conservatively run, leaving the company with a good credit position and ample capital and liquidity to benefit from the improving Argentine economy. While I do expect Banco Macro's ROE to decline (due in large part to the distortions created by inflation), I believe the company can post double-digit earnings growth. If that's a reasonable expectation, a fair value of close to $80 is in play.
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A Recovery In Argentina Can Take Banco Macro Further, But Mind The Risks