Axia Research describes the very good results announced by Greek banks for the third quarter of the year as a strong basis for 2024 performance, surprising the market positively. The outperformance against targets and business plans will continue in Q2, leading to upgrades in management guidance and converging estimates, analysts predict. Against this backdrop, they believe there is significant upside potential for all stocks.

ATTRACTIVE INDICATORS

As Axia Research notes, the four systemic banks are trading at 0.64 times book value, corresponding to a 10% dividend yield for 2025. This means that the sector is more attractive than European banks, which have a P/B of 0.75 with a dividend yield of 7.54%.

THE PREDICTIONS

Analysts predict that interest income will show resilience even as interest rates fall, and fee income has already become a key point in the forecasts. Moreover, the normalization of risk costs continues, with credit expansion emerging as a critical component of the growth narrative for Greek banks.

SHARES

Axia expects Greek banks to continue to reward shareholders through value-enhancing activities such as accelerating distributions (they will reach as much as 50% of earnings for 2024) through cash and share buybacks. Following this, analysts foresee a buying opportunity as the volatility caused by the US election, mixed global corporate results and macroeconomic data are fading into the past.

PRICE TARGETS

Axia recommends buying all four systemic banks, setting target prices: 

• €2.50 for Alpha Bank
• €3 for Eurobank
• €10,50 for National Bank
• €5,30 for Piraeus Bank

It notes, however, that it plans to revise its estimates for the banks' results in 2024 and the following years, so it will also revise its target prices.