Unrivalled distribution potential We are confident that UCG will deliver on target distributions for 2022 ( EUR3,750m) as well as over the plan horizon. 2022-24e distributions (EUR12,250) are nearly 50% of the market cap. Despite writing off the local Russian subsidiary in Q4 22 and topping up coverage on cross-border exposures from 21% to 25% for modelling purposes (-70bps), we estimate a 2022e FL CT1 ratio of 14.1% (net of buy-backs), consistent with guidance of 14.8%. Our 2024e FL CT1 ratio stands at 13.8% with c.EUR2.5bn of excess capital above the upper-end of the 12.5-13% target. Net income targets for 2022 and 2024 can be beaten Unicredit targets a net income of EUR4.3bn in 2024 (ex-Russia and net of coupon on AT1/cashes). At c.EUR4.9bn we are c.15% above despite embedding a higher cost of risk (39bps vs a 30-35bps guidance). Our cost of risk estimates assume an increase of NPE inflows in 2023-24 of 50% vs the 2021 level, with the impact mitigated by the reversal of the management overlays on stage 1/2 loans (c.EUR1.3bn, c.30bps of loans). Management guides for a net income EUR4.8bn in 2022 ex-Russia and net of coupons on AT1/cashes. On a like-for-like basis we estimate EUR5.3bn. NII guidance for 2023 is far too low in our view Unicredit guides for EUR10.1bn of NII in 2023 (ex-Russia) with a 1.5% terminal ECB rate. On our calculations the guidance of EUR9.7bn of NII in 2022 implies a Q422 annualised NII of c.EUR10.5bn. We estimate a 2023e NII of EUR10.9bn with a 2% ECB terminal and zero contribution from the TLTRO (100bps rate hike = EUR500m of NII). Still a sector top pick Unicredit trades on a 2023-24e P/E of just 5.2x and 4.4x respectively. We reiterate our Outperform rating and increase our TP from EUR20.8 to EUR23 (higher solvency and a roll-forward of our valuation model by 6 months). Our adj. EPS estimates for 2023-24e are broadly unchanged.