Poste Italiane: Why Valuation Fails When Analysts Cannot Find Comparable Companies
The investment thesis from Baillie Gifford's Monks fund: Poste Italiane is valued like a bank, but its net interest income accounts for only one-fifth of revenue; the growth potential in e-commerce, digital payments, and its super-app remains far from being priced into the market.
In November 2026, Calum Holt, an investment analyst at the Monks fund under Baillie Gifford, published an investment thesis on Poste Italiane. His core argument is that the market undervalues this company not because of flaws in its fundamentals, but because analysts cannot find truly comparable companies. Consequently, they default to placing it in the peer group of Italian banks, pricing it using the average profit multiples of those banks.
This judgment is supported by a specific chain of evidence. In 2025, Poste Italiane’s net interest income—the classic engine of banking profits—contributed only one-fifth of its revenue. Its income sources are a mix of insurance, digital payments, logistics, and energy resale. Parcel revenue more than doubled between 2019 and 2025; the digital payments business has grown at an annualized rate of 22% over the past five years, currently generating €1.2 billion in annual sales. Since CEO Matteo Del Fante took office in 2017, although revenue growth has been modest at 3%, net profit per employee has grown at an annualized rate of 18%—a financial characteristic typical of the transformation from an inefficient state-owned enterprise to a high-profit platform.
Monks argues that the common thread among these businesses is not bank interest margins, but a trust network built over 150 years of brand heritage, combined with shared infrastructure. Customers can send parcels, pay utility bills, obtain passport photos, open savings accounts, buy insurance, and apply for loans all within the same branch network. The cross-selling success rate of the newly launched super-app 'P' is five times higher than that of old channels. In Monks’ view, the growth opportunities driven by e-commerce, digital payments, and the app are still in their early stages, with profits potentially growing at a rate exceeding 10% over the next decade.