With a “Neutral” recommendation and a target price of 15.5 euros, Piraeus Securities initiates coverage of Optima Bank. The target price offers total return potential of about 10% (including the period’s dividends) from the closing price of 15 euros on October 5. The stock has already gained 95% since the beginning of the year, with market capitalization at 3.33 billion euros.
The valuation is based on a multiple of 2.9 times price to tangible book value per share and a sustainable return on tangible equity (ROTE) of 23%. This percentage is lower than the current one, which exceeds 25%. According to analyst Natasa Roumantzi, the multiple reflects the bank’s structurally high profitability. This is supported by a high-yield corporate loan portfolio, low operating cost, and strong fee generation. At the same time, the multiple incorporates some normalization of returns, mainly in operating costs and capital markets revenues.
According to Piraeus Securities, the investment case depends increasingly on whether Optima will prove that its exceptionally high profitability is sustainable as it matures. For this reason, the brokerage also examines two more scenarios:
- Optimistic scenario, 17.7 euros: the bank maintains its current high-performance model.
- Convergence scenario, 10.2 euros: profitability gradually approaches the levels of traditional banks.
In the base scenario, net profits increase at an average annual rate of about 13.3% in the 2026-2030 period.
The driving force is loan growth of about 14% annually, as the bank, with a market share of around 4%, is gaining ground.
The dividend policy is expected to be conservative, with a distribution of 30% of profits. ROTE is estimated to gradually decline to about 22% by 2030, mainly due to normalization of capital markets revenues.