(News Bulletin 247) – The financial intermediary raised its price target by three euros to 43 euros. He believes that the title could be carried by the launch of a share buyback program as well as an update of its objectives during a strategic presentation in September.

Of the three major banks present on the CAC 40, Societe Generale is clearly lagging behind on the stock market. Its share has fallen by 1.6% since the start of the year, while that of BNP Paribas has risen by 6.7% and that of Crédit Agricole SA by 11.2%.

The bank which Slawomir Krupa has just taken over, succeeding Frédéric Oudéa, is penalized by the fall in its net interest margin in France – while interest rates are nevertheless rising – and by questions about its solvency ratio CET1 in view of its target of 12% (based on Basel IV prudential rules) for 2025, estimates Jefferies in a note published on Friday.

However, the financial intermediary raised its target price on Friday to 43 euros, against 40 euros previously, while confirming its advice to buy. Jefferies sees several catalysts materializing in the coming months for La Défense bank’s stock.

>> Access our exclusive graphic analyses, and enter into the confidence of the Trading Portfolio

Share buybacks and strategic plan

The research department firstly expects the company to launch its €440 million share buyback program in mid-June. This program had been announced by the bank when publishing its annual results and required the approval of the European Central Bank, regulator of banks in the euro zone, which Societe Generale announced that it had obtained last month. Jefferes considers that the French establishment will wait until the end of the subscription period for its global employee share ownership plan, i.e. June 15, to launch this program.

In addition, Societe Generale will hold a day dedicated to investors on September 18 to present a new strategic roadmap. Jefferies believes that the bank could then reserve good surprises on this occasion and potentially revise certain objectives upwards. For example, for its online bank Boursorama, Societe Generale had previously indicated that it was aiming for a profit of around 200 million euros in 2025. But Jefferies points out that this objective had been established on the basis of a customer base of 4.5 million. in 2025 while Boursorama should have 5.5 million at the end of 2023. Jefferies thus retains, in its forecasts, a profit of 283 million euros in 2025 for online banking.

The same is true for its long-term car rental subsidiary ALD. Societe Generale expects the takeover of Dutch LeasePlan, finalized in May, to have a positive impact of at least 5% on its earnings per share in 2024 and 80 basis points on the return on tangible equity (ROTE ). Except that the profits of all car leasing players positively surprise by their strength. Jefferies thus considers that the repercussions of the takeover of LeasePlan by ALD for Societe Generale could be greater than the bank’s initial expectations.

A capital gap that would be smoothly closed

Last point, about the CET1 solvency ratio. Societe Generale posted a CET 1 ratio of 13.5% at the end of March, certainly above its target of 12% for 2025. However, several headwinds will affect this ratio, in particular impacts related to acquisitions and regulations, for a total of 185 basis points (1.85%) Jefferies figure. Restated for these negative elements, the ratio drops to 11.6%, she calculates. This has been a point of market attention, as most rivals have met or exceeded their targets, she explains. But Jefferies expects the bank to bridge that gap smoothly and without burdening the distribution to its shareholders.

On the Paris Stock Exchange, Societe Generale shares benefited a little from this positive opinion, gaining 1.5% at 10:40 a.m., the second largest increase in the CAC 40.

The action had already taken 1.2% the day before after the bank announced agreements to sell several subsidiaries in Africa. These transactions should have a positive impact of 5 basis points on the group’s CET 1 capital ratio on the date of their finalization.