The Bank of America (BofA) maintained its “buy” recommendation for three systemic Greek banks, Alpha, Piraeus, and Eurobank, while upgrading its outlook to “neutral” and “underperform” for the National Bank of Greece (NBG) due to its robust capital base.

In its latest report, BofA underlines that the equities of Greek banks were trading at a discount price compared to European banks, making them very “attractive” for investors.

The American investment bank raised its target prices for Greece’s four systemic banks, reflecting growing confidence in the sector’s outlook. The new price targets are set at €3.59 for Alpha Bank (up from €2.08), €4.08 for Eurobank (from €3.20), €6.88 for Piraeus Bank (from €5.44), and €12.11 for National Bank of Greece (from €8.73).

The U.S. investment bank believes there is still considerable room for a re-rating of Greek banks. It points to improving return on tangible equity (RoTE), an accelerating credit cycle, and a gradual decline in the cost of risk as key drivers that could bring Greek bank valuations closer to their European peers.

Currently, the systemic banks in Greece continue to trade at attractive valuations, with a price-to-earnings (P/E) ratio below 7 and a price-to-tangible book value (P/TBV) ratio of less than 1, levels that the broader European banking sector has already surpassed.

Bank of America forecasts that the valuation discount of the banks in the country compared to European banks could narrow to just 5%–10% over the next two years. This projection is based on ongoing improvements in capital quality and a sustained positive outlook for credit expansion.