Alpha Bank Investment Outlook & Eurobank Stock Upgrade Analysis: Positive Trends for Greek Banks
Morgan Stanley and HSBC have provided a favorable assessment of the Greek banking sector, highlighting Alpha Bank and Eurobank as top investment choices for 2025. According to Morgan Stanley, Greek banks are poised to outperform, despite a remarkable 38% rise in bank stocks on the Athens Stock Exchange since early 2025. Reuters’ analysis complements these insights, offering a comprehensive outlook on the Greek banking sector for the upcoming years.
Greek Banks Market Performance
Most importantly, Morgan Stanley, led by analyst Nida Iqbal, maintains a positive stance on Greek banks, citing attractive valuations compared to their European counterparts. Despite the overall rise in shares, Alpha Bank stands out as a top pick due to its resilience against interest rate cuts and consistent growth in net interest income and fees. The bank’s Return on Tangible Equity (RoTE) is expected to remain stable above 10% from 2025 to 2027.
Furthermore, Morgan Stanley has upgraded Eurobank to “Overweight” following a period of relative underperformance. The bank is projected to see profitability boosts, achieving a RoTE close to 15%. Piraeus Bank also retains an “Overweight” rating, with forecasted profitability between 14% and 15% and increased lending in the first quarter of 2025.
Conversely, National Bank of Greece holds a neutral “Equalweight” rating due to high valuations, despite strong results and a RoTE above 17%. According to Bloomberg’s insights, the broader interest rate environment could impact profitability across the sector.
Morgan Stanley Greek Bank Ratings and HSBC Recommendations
In addition, Morgan Stanley has raised the target prices for Greek banks by an average of 21%, anticipating upside potential of 25% to 38%. They predict the sector will return approximately 23% of its market capitalization to shareholders between 2025 and 2027. Supporting this view, HSBC analyst Cihan Saraoglu confirms the sector’s positive momentum, maintaining a “Buy” recommendation for most Greek banks. Alpha Bank is highlighted as a clear “winner” of the first quarter, with significant operating profit increases, cost control, and fee income growth. The target price is upgraded to €3.75 from €3.05, with earnings for 2026 expected to rise by 17%.
Eurobank also holds a “Buy” recommendation, with a new target price of €3.30, despite a minor correction from previous forecasts. The bank is noted for its geographic diversification and robust activity in Bulgaria. Piraeus Bank’s target price is raised to €7.50, with HSBC viewing loan growth and the upcoming acquisition of National Insurance favorably. Despite some decline in net interest income, its stock is considered attractive based on book value and a 7.8% dividend yield.
Lastly, National Bank retains a “Hold” rating, with a target price upgrade to €11.80. Despite strong liquidity and positive results, HSBC remains cautious due to limited flexibility in cost management and the absence of strategic catalysts. According to Financial Times’ coverage, investment trends in European banks provide a comparative perspective on Greek banks’ valuations.
Overall, despite pressures from interest rate reductions, Greek banks are trading at a significant discount compared to European counterparts—16% on the P/E ratio and 9% on the P/BV ratio, according to Morgan Stanley. The P/TBV ratio for 2026 is projected to be around 0.9 times, as per HSBC. The landscape remains positive, with increasing fees, controlled costs, and non-performing loan ratios approaching European standards. This environment creates attractive return prospects for investors, positioning the Greek banking sector as a key focus for 2025 and beyond. 📈
