Greek Banking Sector Shows Resilience Amid Recent Market Sell-Off
While the banking index has come under scrutiny during the recent sell-off at the Athens Stock Exchange, it continues to record a commendable performance, exceeding +17% since the beginning of 2024. This growth follows a period of significant gains over the past four years. Analysts suggest that the four systemic banks are trading at prices considerably lower than their actual value, which bodes well for market prospects.
The financial results for the first half of the year have proven to be highly encouraging, confirming the upward trend in profitability and increasing the likelihood of surpassing guidance for the entirety of 2024. This, in turn, has implications for the potential size of future dividends from the current fiscal year.
Currently, the cumulative market capitalization of the four systemic banks exceeds €23 billion, despite being at least 7% below this year’s peak. This figure is significantly higher than during the challenging economic crisis period when the value of the four banks barely exceeded €3 billion.
Eurobank: Leading the Market
Eurobank, the most valuable bank with a valuation of €7.4 billion, consistently trades above €2 per share (a high since 2015), recording a rally of approximately 25% since the start of 2024. With a price-to-earnings (P/E) ratio of 5.5x and a price-to-book value (P/BV) ratio of 0.8x, it is no surprise that analysts have set an average target price of €2.6, indicating an upside potential of +31%.
National Bank: Strong Performance
Meanwhile, the stock of the National Bank, which boasts a market capitalization of €7 billion, has gained at least 21% in 2024, despite being nearly 11% away from its peaks of €8.6. The average target price is set at €9.5, representing a 23% upside, with the P/E ratio calculated at 5.5x and the P/BV ratio at 0.8x. Additionally, the divestment of 18% by the Greek government remains pending.
Piraeus Bank: Steady Growth
Furthermore, Piraeus Bank, with a market value of €4.9 billion, is experiencing a growth rate of 22% since the beginning of the year, having temporarily reached €4.2 (currently slightly below €4.0). With a P/E ratio of 4.6x and a P/BV ratio of 0.6x, analysts reasonably set their expectations at €5.2, indicating a potential rally of 35% over the next 12 months.
Alpha Bank: Room for Improvement
Lastly, Alpha Bank, with a market capitalization of €3.7 billion, is up +2% since the start of 2024, having recently been trapped in the €1.5 to €1.7 range. Analysts, however, have set an average target price of €2.3 (+47% from current levels), given the P/E ratio of only 6.2x and a P/BV ratio that does not exceed 0.5x.
Analysts’ Average Target Prices for Systemic Bank Stocks
- Eurobank: €2.6 (+31%)
- National Bank: €9.5 (+23%)
- Piraeus Bank: €5.2 (+35%)
- Alpha Bank: €2.3 (+47%)
Stock Market Update: Blue Chips Defy Sell-Off
The stock market has recently seen a significant fluctuation, with a notable increase of 2.3 euros, representing a 47% rise. Despite the broader sell-off affecting many stocks, blue-chip shares have remarkably maintained their value and resilience.
This strong performance highlights the ability of certain well-established companies to withstand market volatility. Investors are observing these blue-chip stocks closely, as they continue to show strength in challenging economic conditions.
As the market evolves, the focus remains on the stability and growth potential of these blue-chip shares, which have proven to be a reliable choice for many investors looking to safeguard their portfolios.
