Morgan Stanley cautious about Greek banks – Positive, but also with an unfavorable scenario

Morgan Stanley appears enigmatic… even sibyllic as concerns Greek banks, as although it confirms its positive attitude, especially for Piraeus and National Banks, it also gives estimates for lower prices, under an unfavorable scenario.

Of course, as it is quick to point out, Greek banks offer the best exposure to risk, since they have now made significant progress in clearing their balance sheets, reducing non-performing exposures (NPEs) to single-digit levels, while their coverage levels are also high.

High in Morgan Stanley’s preference is the share of Piraeus with a target price of 4.40 euros, but also National Bank with a target price of 8.33 euros, and a recommendation for returns better than those of the market (overweight). For Alpha Bank it stands neutral, with an equal weight recommendation, with a target price of 2.11 euros and for Eurobank with a target price of 2.10 euros.

Adverse and ideal scenarios

Although the above target prices imply a significant estimated return of 40% to 55%, Morgan Stanley does not fail to provide price estimates in both an adverse and an ideal scenario.

For Piraeus, the positive scenario suggests a target price of 5.32 euros, but in the negative the target price is 1.77 euros. Accordingly, for the National Bank the two prices are 9.52 euros and 4.33 euros, for Alpha Bank they are 2.37 euros and 0.85 euros and for Eurobank at 2.39 euros and 1 euro.

The positive scenario indicates a stronger recovery of the Greek economy with an increase in credit expansion and a decrease in NPEs. Also financing costs are lower and the RoTE efficiency ratio is 12.5% based on 2025 estimates.

On the other hand, the negative scenario includes a lower than expected absorption of EU funds, anemic growth, credit contraction and higher NPEs. RoTE will be just 5.9% in 2025.