In a new report on the banking sector, the Alpha Finance estimates that investors remain cautious in banking stock markets in view of the upcoming transactions, with the most important one being the sale of National Bank shares. At the same time, the brokerage emphasizes that the recent weakness of the market is an excellent entry point for investors, with Alpha Finance expecting a recovery in banking stocks over the next period.

In particular, AF analysts estimate that the valuation of Greek banks is particularly attractive at current levelsas they trade at 0.7x P/TBV and 5.7x P/E based on 2025 estimates, with profitability remaining very high (return on equity significantly above 10% by 2026). In addition, stock market analysts they estimate that dividend yields will increase significantly in the coming years, further enhancing the attractiveness of domestic bank stocks.

The stock market analysis department points out that over the past two years, the Net Interest Income of the Greek banks have increased significantly, resulting in a significant improvement in their profitability. They emphasize, in fact, that despite the expected normalization of interest rates which will put pressure on interest income, there are certain factors and actions that are estimated to limit the fall, maintaining strong revenue and profitability.

Given the above, the stock market is proceeding with an upgrade of the estimates for the profitability of the Greek banks incorporating higher organic revenue which leads to higher earnings estimates of around 11% for 2025-26, and by extension higher target prices by 6% on average.

The new price targets suggest significant upside from current levels (from 40% and above including dividends) justifying a “Buy” recommendation for all three banks (Eurobank, National Bank, Piraeus) that covers.

More specifically, the Bank of Piraeus shows the highest upside with a target price of €5.23, reflecting its favorable risk/reward profile due to its attractive valuation, followed by Eurobank (target price €2.65), given its development initiatives and then the National Bank (target price €9.50) thanks to its strong profitability and capital adequacy.