Greek Banks: New rates – targets from international banks

The Athens Stock Exchange, with a weekly increase of 4.83% and total gains of 37.4% this year, may be at the top of the global returns moving to new 9-month highs, but Greek banking shares with gains of over 60% are the ones that outperform as they remain the market locomotive.

The Goldman Sachs conference

The Greek bankers, who were also present at a recent investment conference of Goldman Sachs in Paris, were a pole of attraction for the participants, estimating among other things that the country will regain the investment grade in September or around this period, while the status of “investment grade” will open the door to upgrades in the credit rating of banks and Greek companies, as a result of which they estimate that the new bond issues they will proceed with will take place at a lower cost.

The investment grade

It should be noted that JP Morgan also predicts that with the ability to form an independent government by New Democracy after the second ballots, Greece will regain the status of “investment grade” from DBRS on September 8 and from S&P and Fitch on October 20 and December 1 respectively, which it is expected to lead to the attraction of new investment funds in all domestic assets, thus stimulating investment and liquidity in the entire economy. At the same time, foreign ratings agencies are increasing their target prices for bank shares.

Overweight for Piraeus and Eurobank

Morgan Stanley e.g. recommends “increasing positions” (“overweight”) for the shares of Piraeus and Eurobank, with new target prices in its base scenario of 4.04 euros and 2.10 euros respectively, and recommending “positions commensurate with the market” (” equal-weight”) for the shares of Alpha Bank and National Bank, with target prices in the base scenario of 1.98 euros and 7.05 euros respectively.

Based on three scenarios, it calculates at average levels that Greek banking shares show margins of 40% rise in the base scenario and 69% in the bull scenario, but also 48% fall margins in the bear scenario.

Ambrosia Capital also maintains a “buy” rating on Greek bank shares with target prices of 1.90 euros for Alpha Bank, 2.05 euros for Eurobank, 7.95 euros for National Bank and 3 .95 euros for Piraeus.

Alpha Bank is in the top 10 picks

JP Morgan ranks Alpha Bank’s share among the 10 top picks from the entire CEEMEA region (Central and Eastern Europe, Middle East and Africa), considering the target for a RoTE of 12% until 2025 to be reliable.

At the same time, he recognizes the positive prospects of the Greek economy, emphasizing his preference for the banks, which he sees as being favored by the favorable macroeconomic environment and the possibility of a strong government. Also of particular importance is JP Morgan’s assessment that placements in Greek banks will accelerate in the next period.