JP Morgan maintained its “overweight” recommendation for Greek banks, while raising its target prices, following revisions to earnings per share (EPS) estimates for the period 2023-2026.
Except for Eurobank, for which it retains the target price at €2.60, JP Morgan has increased its target prices for Alpha Bank to €2.50 from €2.20, National Bank of Greece to €8.40 from €8.10, and Piraeus Bank to €5.00 from €4.65.
JP Morgan sees significant improvement in the four Greek systemic banks’ trends for net interest income (NII), also revising its EPS estimates upward by an average of 5% for 2023 and 2024 and 8% for 2025.
Alpha Bank recently announced its ambition to achieve a >12% Return on Tangible Equity (ROTE) by 2025, targeting an increase in EPS with a cumulative annual growth rate (CAGR) of >20% between 2022 and 2025. JP Morgan values the 10% ROTE lower than the target, as it does not adjust capital for excess capital, indicating a potential increase to 11%.
JP Morgan expresses a preference for National Bank, citing high adaptability to higher interest rates, a stable deposit base, and a CET1 ratio of 17.9% in Q3 2023, projected to increase to >19% by 2025E, providing ample room for dividends from 2024 onward.
Eurobank is highlighted for having the highest normalized ROTE among the banks (13% by 2025) and a CET1 ratio of 16.4%, remaining steady and strong capital trajectory with a CET1 of 17.8% by 2025 after the merger with the National Bank.
Piraeus Bank, equipped with the necessary capital, has reduced non-performing exposures by >€20 billion since the end of 2020, aiming for an ambitious ROTE of 14% in 2023 and 12% in 2025. The bank targets the resumption of dividend payments from 2023 onwards, subject to regulatory approval.
