Athens, Greece. Investment broker Eurobank Equities said the Greek banking sector, including institutions also operating in Cyprus, remains undervalued and maintained a “buy” recommendation for all banks while pointing to further upside potential.
Higher target prices and upgraded forecasts
Eurobank Equities announced higher target prices for Greek banks, setting them at 4.50 euros for Alpha Bank, 17.45 euros for National Bank of Greece, 10.30 euros for Piraeus Bank, 11.20 euros for Optima Bank and 11.10 euros for the Bank of Cyprus, reflecting upgraded profitability forecasts.
Stock selection highlights
In terms of stock selection, the brokerage said Piraeus Bank is the most attractive option, driven by a combination of low valuation and strong earnings growth. It also said the Bank of Cyprus stands out for its high distribution profile and resilience in adverse scenarios.
Recommendation changes
The brokerage said it upgraded Alpha Bank and Optima Bank to a “buy” recommendation, citing improved outlooks and a stronger risk-return balance.
Valuations and sector metrics
Eurobank Equities said valuations remain subdued across the sector despite strong profitability, indicating a potential disconnect between fundamentals and market pricing. It said the sector is trading at around nine times its 2026 earnings and approximately 1.4 times tangible book value, levels it said do not fully reflect returns.
It estimated shareholder returns at between 7 per cent and 10 per cent, while the discount versus European banks remains above 20 per cent, despite convergence in profitability and capital adequacy. Eurobank Equities said this valuation gap represents the key investment opportunity, as the market has yet to fully adjust to the new fundamentals.
Market volatility and fundamentals
The analysis said recent volatility driven by geopolitical tensions and rising energy prices has had limited impact on the core fundamentals of Greek banks.
Which of the banks cited by Eurobank Equities are you most interested in following?
