The sell-off has brought the valuations of Greek banks to attractive levels, HSBC reports and is proceeding with an upgrade of the target prices it gives for the four systemic ones, confirming the buy recommendation.
Specifically, it increases the target price for Alpha Bank to 1.60 euros (from 1.40 euros before) seeing a 64% growth margin, for Eurobank states that it places it at 1.45 euros (from 1.30 euros before) with an increase margin of 84%, for the National Bank at 3.90 euros (from 3.55 euros before) with an increase margin of 47% and for Piraeus Bank at 2.10 euros (from 1.95 euros) with an increase margin of 78% .
As he points out, after the escalation of the Russia-Ukraine crisis, the Greek banking shares lost 30% of the revaluation they had recorded from September 2021 to February 2022 and the estimated P / TBV indices for 2022 fell to 0.40x .
“We consider the sell-off to be excessive, given the progress made in clearing the NPEs since last September and the limited change in the outlook for ROTE equity ratios.
HSBC’s estimate of 13% cost of COE equity (which remains unchanged) already records rising interest rates and increased volatility. Also, as he adds, there is a limited change in its long-term forecasts for the profitability of Greek banks and the revisions together with the estimates for the size of the whole of 2022 continue to lead to an increase of 11% of the target prices on average.
For this reason, HSBC confirms the “market” rating for all four banks, with Eurobank remaining its favorite play.