The outlook for the Athens Stock Exchange and the shares of Greek companies is positive, according to two new reports published by Bank of America (BofA) and UBS.

The Swiss house said that Greek banks reported a strong quarter, with interest income (NII) remaining at a satisfactory level and interest rate margins better than expected. Analysts point out that the credit expansion achieved has resulted in new loans offsetting the losses from the European Central Bank's policy of cutting interest rates.

THE PROFITABILITY BET

UBS notes that Greek banks' ROTEs are attractive, ranging from 12.1% to 19.9% in Q3, setting a solid foundation for capital. However, profitability is expected to normalise as interest rates fall. This is the bet for the domestic banking system. That is, that the sector maintains its positive figures.

According to analysts' estimates, the impact in 2025 from interest rate cuts will be around NII 4.3% to 8.7%. Therefore, until 2026, a relative stability in profitability will be observed. ROTE is expected to reach:

• 13,5 % for Alpha Bank
• 13% for Eurobank
• At 17% for National Bank
• At 14.2% for Piraeus Bank

UBS is upgrading earnings per share for 2024 to between 1% and 5%, while the target prices are as follows:

• At €2.42 for Alpha Bank with an upside of 51%
• At €2.75 for Eurobank with an upside of 39%
• At €11.20 for Ethniki Bank with an upside of 55%
• At €5.2 for Piraeus Bank with an upside of 55%

WHAT BOFA PREDICTS

For its part, Bank of America (BofA) notes that the Greek economy will continue to grow at a rate above the Eurozone average. Private consumption, falling deficit, the Recovery Fund and capital spending will be the main drivers of growth in the domestic economy. However, the challenges are threefold:

• Labour shortages
• The delay in implementing reforms
• Difficulty in accessing finance

BONDS - BANKS

Regarding Greek bonds, analysts point out that "we see the spread with the German bond not exceeding 70 basis points. The main risks are geopolitical. We now have a positive outlook for the Greek banking sector, with three of the four Greek banks we cover rated buy." These are :

• Eurobank
• Piraeus Bank
• Alpha Bank

JUMBO AND AIA

"Among non-banking stocks, Jumbo is well positioned to benefit, thanks to its unique value-oriented model. The share's undemanding valuation and shareholder returns support our buy rating with a target price of €36," say BofA analysts.

For Athens International Airport (AIA), they state: "We rate the stock at neutral with a target price of €9. We forecast volume +6% in 2025, with air capacity data showing a 12.5% annualised growth rate in Q1 2025. However, the regulatory cap on yields in the aviation sector is largely offsetting strong operating performance, and we forecast lower tariffs during 2025."