Report by ResearchGreece

ResearchGreece revisits their stock picks and assesses the political outlook ahead of the next parliamentary elections. Macro conditions remain solid, with Q1 real GDP up 2.0% Y/Y, although inflation accelerated to 5.2% Y/Y in May (+0.0% M/M). With the Athens Index up +11% YTD, valuation multiples of non-banks in their universe have expanded to 13.2x P/E and 8.0x EV/EBITDA 2027, leaving more limited upside. Combined with polls pointing to a hung parliament, ResearchGreece is turning more cautious on Greek equities. Banks remain their preferred exposure (solid outlook - volume, rates, asset quality) as a leveraged Greek macro play. They prefer National Bank of Greece, Bank of Cyprus, Piraeus and Optima. Outside banks, they favour selective infrastructure, industrial and defensive names such as OTE, Titan, PPC and Piraeus Port over consumer stocks and cyclicals.

Report by AIR Capital

Greece is healing - after a brutal 15-year wait, the country has finally regained its BBB investment-grade rating from Fitch. Despite chronic under-investment in infrastructure, Greek corporates have expanded at home and abroad and now boast strong balance sheets, often with net cash - a rarity in Europe. Ultra-low labour costs and the highest workload in the EU have boosted competitiveness, while political stability since 2019 has restored investor confidence. Yet Greek equities still trade at half their 2008 market capitalisation, leaving substantial upside for companies that are leaner, stronger and more agile than their European peers. AIR’s Buy-rated ideas include Athens International Airport, Motor Oil, National Bank of Greece and Sarantis, each offering 40-100%+ upside.

Financials

Report by ResearchGreece

ResearchGreece remains bullish on Greek banks following Q1 results, citing strong economic growth, fiscal discipline and resilient asset quality that support lending, fee growth and capital generation. Higher 2026-27 RoTE estimates have led to raised price targets: NBG (€12.3), Eurobank (€3.5), Piraeus (€7.8) and Alpha (€3.1). Distribution yields range from 7.5%-10.0%, with payout ratios lifted to 70% for NBG and 60% for Eurobank. NBG, with CET1 above 19%, has the highest payout potential and deploying its €2bn in excess cash is a key catalyst. ResearchGreece favours a mix of bolt-on, fee-generating acquisitions and increased shareholder returns.

Financials

Report by ResearchGreece

Recent weakness relates to investors pricing in steeper ECB rate cuts and lower rates in 2025 and 2026 than both before the central bank's Oct 17th meeting and compared to what banks have plugged in their RoTE guidance. However, ResearchGreece believes the market is overreacting to the potential earnings downgrade. If market expectations materialise, their earnings estimates are facing a 3%-7% downgrade in 2025 and 4%-6% in 2026. While a 40-100bps hit to their 2025-2026 RoTE estimates is not pleasant, it is not game changing either. ResearchGreece estimates P/TBV 2026 multiples at c.0.80x for Alpha and c.0.90x for NBG, Piraeus and Eurobank, implying 30% (NBG) to 90% (Alpha) upside from current levels.

Financials

Report by ResearchGreece

ResearchGreece raises their 2023/2024/2025 net income estimates by +35%/+15%/+26% on lower deposit costs, higher income from securities and higher ECB deposit rates. They expect the bank to raise its 2023 RoTE guidance closer to their 13.5% estimate. It will be interesting to see if management changes its 2025 RoTE guidance as well (now at >12%). ResearchGreece’s RoTE 2025 stands at 11% as they assume ECB rates go down by 50bps within 2025, impacting loan rates and Eurosystem income. Their TP increases from €5.76 to €7.25.

Financials

Report by ResearchGreece

What better time for the Greek state to dispose of its (sovereign crisis) leftover stakes in the country's banks? For totally risk adverse investors ResearchGreece recommends Piraeus Bank; sees ~50% upside based on RoTE/CoE estimated fair 2023 P/TBV of 0.55x. Investors worried about downside risk should go with NBG; sees 30% upside towards fair 2023 P/TBV of 0.80x. For all Greek banks, the current outlook points to RoTE >10% on higher NII offsetting additional MREL costs, controlled CoR (no recession), and the Mitsotakis administration renewing its mandate in the forthcoming elections.

Financials

Report by ResearchGreece

Not for turning - Board rejects Lone Star’s latest €1.51 per share offer. What should shareholders do? If you believe BoC’s RoTE will not exceed 5% by 2024 you are better off selling at any price close to €1.50. However, ResearchGreece’s base case scenario is that BoC’s RoTE will reach 7.5% in 2024 and rise to 8.3% in 2025 (both of which are below management guidance) and calculates the equity is worth €2.08-€2.19 per share (60%-70% upside). Sees no reason for the bank to trade below the average 0.43x P/TBV 2023E of its Greek peers or even below the 0.50x-0.54x of best NPE/CET1 positioned Eurobank and National Bank of Greece.

Report by ResearchGreece

Covering 22 names (80% of total M/Cap), ResearchGreece provides unbiased research, analysis and ideas on Greek (& Cypriot) equities. They offer a clear-cut, binary rating system: Own It (OI) or Do not Own It (DOI). Two stocks they are particularly keen on are…

National Bank of Greece (ETE) - Deserves to be trading at a higher P/TBV multiple than the current 0.50x; enjoys the highest FL CET1 among Greek banks; will benefit the most from a loan rate increase given its low L/D ratio; boasts the lowest combination of NPE ratio and NPE coverage.
OPAP (OPAP) - Q4/FY results comfortably beat expectations on stronger online contribution (Betting and Casino) and GGR/EBITDA guidance for 2022 points to ~40% growth Y/Y. In addition, the dividend was increased to €1.5/share (11% yield).

Financials

Report by Creative Portfolios

A standout in Greek banks - ETE is in its third year of a transformation plan which is beginning to show tangible operational improvement including a strong performance in e-banking. Asset Quality ratios continue to make great strides and less than 7% of moratoria beneficiaries are in early arrears (>30dpd). On the capital front, ETE has enhanced its position, delivering CET1 and Total CAD ratios of 16.1% and 17.1% respectively. The share price has risen over 90% in the last 12 months, yet ETE remains attractively valued with a FV of 5%, a PBV of 0.44x, and an Earnings Yield of 12.45%.