Higher profits, higher target prices
Analysts are revising their forecasts upward for the 2026–2028 period, incorporating an environment of higher interest rates for a longer duration, resilient fee generation, and positive operational trends. As a result, total revenues, pre-provision profits, and net income for the banks are expected to settle higher compared to previous projections. At the same time, average return on tangible equity (RoTE) is expected to remain above 16% through 2028, reinforcing the image of a sector that has entered a distinct phase of structural profitability.
From "discount" to sustainable profitability
One of the main conclusions of the report is that the true profitability of Greek banks may be higher than what current market valuations reflect. The gradual reduction of non-performing assets, combined with the normalization of regulatory capital burdens, is expected to yield positive effects on long-term earnings. In this manner, Greek financial institutions can narrow the gap toward the profitability levels seen in top-performing European banks. The primary investment thesis, according to Alpha Finance - AXIA, is shifting away from valuation discounts toward sustainable profitexpansion.
P/TBV at 1.5x and P/E at 9.5x for 2027
Greek banks continue to appear attractive relative to European peers, trading at approximately 1.5 times tangible book value (P/TBV) and 9.5 times estimated 2027 earnings (P/E). Simultaneously, return on tangible equity (RoTE) is projected to top 16%, while earnings per share (EPS growth) is estimated at 11% through 2028. This financial picture reinforces the assessment that the Greek bank rally no longer relies solely on valuation re-rating, but rather on sustaining elevated profitability levels.
Short-term caution following the rally
Despite the positive long-term outlook, the brokerage firm appears more cautious over the short term. Following the impressive stock market rally in recent months, a period of profit taking or consolidation across banking shares cannot be ruled out. This assessment does not invalidate the positive stance on the sector, but reflects the likelihood of a stabilization phase after significant upward movement.
Eurobank and Bank of Cyprus as top picks
Alpha Finance - AXIA reiterates its positive stance on the banking sector and raises its target prices for all institutions covered. At the top of its preferences remain Eurobank, with a target price of 5.70 euros, and Bank of Cyprus, with a target price of 12.30 euros. Eurobank stands out for its consistent profit growth trajectory, while Bank of Cyprus is highlighted for its secure, highly profitable business model and substantial capital returns to shareholders.
National Bank for dividends – Piraeus for growth
National Bank of Greece, with a target price of 19 euros, represents the primary choice for investors focused on dividend yields, according to the report. On the other hand, Piraeus Bank, with a target price of 11.60 euros, is characterized as the purest play on domestic expansion. Thus, the picture framed by Alpha Finance - AXIA for the Greek banking sector condenses into three elements: stronger profitability, higher target prices, and increased payouts, with individual selections tailored to different investor profiles.
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