Alpha Finance - AXIA is taking a more cautious view of the Greek equity market in the final quarter of 2026. In its new strategy report, titled “Time to slow down?”, it says the Athens Stock Exchange has already exceeded its targets for this year.
The General Index is up 22.5% since the start of the year. That exceeds the upper end of analysts’ initial forecast range of 10%-20%. From its late-March lows, when geopolitical developments weighed on the market, it has gained 31.5%. This is despite a 5.3% correction from its 30 September peak. The Greek stock market is therefore heading for its fifth consecutive year of gains. It is comfortably outperforming international indices: the Stoxx 600 is up 7.2%, the S&P 500 13.8% and the MSCI World 11.3%.
According to the analysis, this year’s gains have been driven mainly by a re-rating, as well as upward revisions to earnings estimates, while Greece’s upgrade to developed-market status has also played a decisive role.
Four reasons for caution
Alpha Finance - AXIA analysts identify four factors that warrant a more cautious stance through the end of the year:
- Strong returns could trigger profit-taking.
- The 18 September rebalancing, linked to Greece’s upgrade to developed-market status, likely prompted significant advance positioning.
- Investors looking to increase their exposure to Greece may prefer to wait until the new year.
- Rising volatility in bonds and energy prices could spill over into equities.
Nevertheless, Alpha Finance - AXIA maintains that macroeconomic and corporate trends remain healthy and are underpinned by political stability. It therefore sees any correction as an opportunity to build positions with a medium-term horizon.
Top picks: Eurobank out, IPTO Holdings in
As part of their more defensive stance, the analysts are removing Eurobank from their top picks. The shares have returned 18% since being added, and the move is described as tactical, as the group’s fundamentals remain “excellent”. IPTO Holdings takes its place, with a target price of €4.71 against a current price of €4.29.
On IPTO Holdings, the analysts highlight the following:
- As a regulated monopoly in electricity transmission, it has a defensive profile.
- Its regulated asset base is expected to grow from €3.1bn in 2025 to €7bn in 2029.
- Potential catalysts include the Great Sea Interconnector and the North Aegean and Dodecanese interconnections gaining PMI status.
The following stocks remain on the list, all with a “buy” recommendation:
- Bank of Cyprus, target price €12.30: dividend yield is expected to reach 10.3% in 2027.
- GEK TERNA, target price €55.20: construction backlog of more than €9bn, while concessions are expected to account for 80% of EBITDA by 2030.
- PPC, target price €29.10: a €24bn investment plan and an estimated adjusted EBITDA of €4.35bn in 2030.
- Jumbo, target price €32.70: dividend yield of 8.8% and expansion in Romania.
Scope for further re-rating
Despite the gains of recent years, Alpha Finance-Axia analysts believe the Greek market remains attractively valued. The General Index trades at 11 times earnings and 6.7 times next-12-month EV/EBITDA. This represents a 20%-30% discount to comparable markets and a discount of about 20% to pre-crisis levels, when the P/E ratio was around 14 times.
The next major milestone is MSCI’s upgrade in May 2027. Banks are expected to continue benefiting from the associated flows. However, the analysts warn that index flows will cause volatility around implementation dates. They also note that a broader investor base does not automatically translate into net inflows.
Shipping
The analysts attach particular importance to shipping companies joining the stock market. Safe Bulkers and Star Bulk have already listed, with the imminent IPO of Capital Finance Maritime to follow. Shipping is seen as a new and potentially significant sector for the market.
Resilient economy, inflationary pressures
On the macroeconomic front, the report draws on estimates in the draft 2027 Budget:
- GDP is expected to grow by 2% in 2026 and 2.3% in 2027, compared with 0.9% and 1.2% in the eurozone.
- Harmonised inflation is forecast at 3.6% this year, due to the energy shock, and is expected to ease to 2.4% in 2027.
- The primary surplus is estimated at 3.6% of GDP.
- Public debt is expected to fall from 146.1% of GDP in 2025 to 128.8% in 2027.
The current-account deficit remains a key structural weakness, standing at 7.7% of GDP in the first half of the year.