After a “championship” rally the stock market, in August shows signs of fatigue. But at the same time, foreign investment houses are renewing their “vote of confidence” in the Greek stock market and in Greek banks,

JP Morgan predicts a continuation of the Greek stock market rally, due to stable dynamics in banks, attractive valuations and a strong macroeconomic backdrop.

THE JP Morgan believes that the strong rally that A.A. from the beginning of the year (40%) still has a long way to go. Greek stock market valuations are still attractive with an estimated 12-month P/E at 6.0x, 49% cheaper than emerging markets.

The index MSCI Greece trades at attractive levels compared to the 5-year average and based on P/E (6x) but also P/BV (0.7x), with a discount of 49% and 45% against emerging markets internationally and against region of the emerging markets of Europe, the Middle East and and Africa.

THE Morgan Stanley points out that Greece is at the top of its emerging markets portfolio and despite its high yield since early 2023 is still cheap as it trades at just 7.5 times earnings and a dividend yield of nearly 4.7% .

MSCI Greece is also showing its best performance since the end of October last year and has performed strongly since the beginning of the year but the technicals are in overbought territory, but not at extreme levels. Funds investing in emerging markets (GEM) have increased their exposure to Greek banks in recent quarters.

According to Citigroup, the earnings per share of the Greek listed companies is expected to increase by 16% this year, a percentage which remains very high compared to the estimates for developed markets, USA and emerging markets.

At the same time, according to Citigroup, the estimated dividend yield of Greek shares is 4.4%, above the average in Europe and the USA, which are 3.6% and 1.5% respectively. In global markets, developed and emerging, it is placed at 2.2%, 2.1% and 2.9% respectively.

Maintains its overweight stance on Greek shares HSBC and argues that Greece stands out as one of the really good reform stories in the field of emerging markets. Despite the strong performance this year, valuations look more reasonable. Greek PE is just 7.8x versus 13.2x for the emerging market average and 12.6x for Europe.

He identifies seven stocks that are investment opportunities and to which he gives a “Buy” recommendation: National with a target price of 7.95 euros, Eurobank at 1.95 euros, OPAP at 20 euros, Piraeus at 4 euros, Jumbo at 33 euros, Alpha Bank 2.2 euros and Aegean Airlines 16.3 euros.

The banks

International, as well as domestic investment houses are particularly bullish on banking stocks and despite the significant rise in the banking index (over 60% since the beginning of 2023) they are proceeding to increase target prices.

Deutsche Bank gives Alpha Bank a target price of 2 euros (from 1.90 euros previously), with a “buy” recommendation, for Eurobank at 2.05 euros (from 1.90 euros), with a “buy” recommendation “, for Ethniki at 7.10 euros (from 6.70 euros), with a “hold” recommendation and for Piraeus at 3.30 euros (from 3 euros), with a “hold” recommendation.

Overall, the house estimates that the good performance of Greek banks will continue, with interest income likely to peak in the third quarter due to rising funding costs.

The analysts of the investment bank JP Morgan report that the strong results announced for the second quarter by the Greek banks reinforce their choice to consider Greece as a top choice in the emerging markets region.

With an estimated 12-month P/BV ratio of 0.6x, Greek banks are among the cheapest banks in emerging Europe.

Higher core revenues, cost control and lower credit costs underpinned the results of the four Greek systemic banks in the first half of 2023, Canadian ratings house DBRS notes.

A new rally is coming for the banks with a margin of up to 52% according to Euroxx and despite the rise of almost 60% of the banks, they still have impressive margins, as, above all else, they continue to trade at a discount compared to the European , as Euroxx emphasizes in its report.

It gives the following price targets: Alpha Bank at 2.10 euros, with a 40% upside margin, Eurobank at 2.30 euros, with a 52% upside margin, Ethniki at 8.50 euros, with a 33% upside margin, Piraeus at 4 .60 euros, with a margin of 38%.

As the P/E ratio for 2023 highlights, it is close to 5x, a discount of 10-20% in relation to the European corresponding sector.