Morgan Stanley backs Greek banks as European share sell-off creates buying opportunity

Athens, Greece. Morgan Stanley considers the recent fall in European banking shares a buying opportunity, attributing the decline to weaker sentiment towards government bonds and investors taking profits rather than deteriorating sector fundamentals. Its latest report retains a favourable view of Greek lenders.

Positive outlook despite market volatility

The report’s findings, shared by Greek business outlet Newmoney, highlight Greek banks’ valuations, resilient profitability and solid capital positions despite fresh volatility affecting European bond markets.

Morgan Stanley estimates that Greek banking shares are trading at approximately 9.6 times forecast 2027 earnings and 8.8 times forecast 2028 earnings, levels it considers attractive.

The report expects the sector’s return on tangible equity to stay near 17 per cent in the years ahead. This measure assesses banks’ ability to earn profits from shareholder investments with intangible assets excluded.

Overweight ratings for three lenders

Morgan Stanley includes Alpha Bank among its favoured European mid-cap lenders. It assigns the bank an Overweight rating and sets its price target at €5.50. Against the report’s valuation of €4.65, that suggests roughly 18 per cent upside.

Piraeus Bank and Eurobank also carry Overweight recommendations. For Piraeus Bank, Morgan Stanley sets a €12.30 target against a €10.65 valuation, indicating 15 per cent potential upside.

The Eurobank target is €5.40, versus a valuation of €4.70, likewise suggesting a potential gain of 15 per cent.

Neutral stance on two banks

Morgan Stanley adopts a more neutral stance towards National Bank of Greece, assigning an Equal-weight rating. Its €19.30 target implies potential upside of 13 per cent.

CrediaBank is also rated Equal-weight. The report gives it a €1.01 reference price and a €1.09 target, indicating approximately 8 per cent potential upside.