UBS has made a slight upgrade to its EPS estimates following Eurobank’s strong third-quarter results. It gives the shares a target price of €5.4 and a “buy” rating.
Third-quarter 2026 results were strong, with adjusted net profit beating management’s estimates by 5% (and UBS’s estimates by 4%). Return on tangible equity (ROTE) came in at 17.8%, while the CET1 ratio remained strong at 15.5%.
Management expressed confidence that it would meet, and was more likely to exceed, its targets for financial year 2026, as organic growth remains strong. Net interest income (NII) is running above the already upgraded target of €2.7bn for 2026 (UBS estimate: €2.8bn). We raise our estimates for 2026 adjusted earnings per share (EPS) by around 1%, forecasting annual growth of 17%—a strong start towards achieving the target of annual growth of more than 10% over 2025-2028E (UBS estimate: +13.6% a year).
One of the key takeaways from the third-quarter results was strong NII growth (+5.0% quarter on quarter and +13.7% year on year), as the net interest margin (NIM) widened by 5 basis points quarter on quarter to 2.53%, with a positive contribution from relatively high NIM in Southeastern Europe (SEE), which stood at 2.86%.
Greece also delivered a positive surprise, with NIM widening by 7 basis points to 2.30%. The deposit mix remained favourable, with the share of demand deposits steady at 67% (70% in Greece). Deposit growth was also strong, at 10.4% year on year, with deposits in Greece up 12%.
Management said on the conference call that NII sensitivity to interest rates had fallen to around €25m a year for each 25-basis-point rate increase, from around €35m previously, owing to increased hedging.
Eurobank shares trade at a 2026 P/TBV multiple of 1.7x, against ROTE of 17%. We believe there is scope for even higher returns on tangible equity as the bank deploys its excess capital. The acquisition of Eurolife has been completed and is expected to contribute around €100m in annual fee income, starting in the fourth quarter.
“We believe the valuation remains attractive for a regional growth story with high returns,” the analysts write.
Piraeus Bank
Third-quarter 2026 results highlighted strong underlying trends, particularly in NII, which rose by 7% quarter on quarter. However, several losses from non-core activities and one-off items weighed on the bottom line, the broker notes. It gives the shares a target price of €12.5 and a “buy” rating.
We therefore cut our estimates for 2026E adjusted EPS by 4%, while forecasting reported EPS of 92 cents a share, slightly above management’s target of around 90 cents.
Management said there was scope to exceed both its NII and fee income targets. Targets for 2027 have also been revised upwards, pointing to reported EPS growth of around 10% from the 90 cents a share forecast for 2026, or about 99 cents a share for 2027E—an estimate we consider conservative (UBS estimate: 107 cents a share).
We view 2026 as a transition year, as the bank also continued to clean up its loan portfolio and invest in integrating Ethniki Insurance.
Management said there was scope to exceed the 2026 NII target of €2bn, which was raised after the second-quarter results. The 9-basis-point quarter-on-quarter widening in NIM to 2.31% stood out, following a similar 9-basis-point increase in the second quarter. We expect NIM to exceed management’s target of around 2.20% for 2026 (UBS estimate: 2.27%). Loan trends remain on track to meet the 2026 target, while deposit growth of 9% year on year is notable. This reflects the repatriation of capital to Greece at levels above those factored into the business plan, providing a strong positive driver. Interest-rate sensitivity is unchanged, at around €40m a year for a 25-basis-point increase in Euribor, while higher-than-forecast interest rates point to scope to exceed targets.
The shares look relatively attractive by European standards, trading at a 2028 P/E multiple of 8.0x. We also consider the P/TNAV multiple of 1.6x attractive, given medium-term ROTE of around 17% (with a CET1 ratio of 13%).
The dividend yield of around 7% for 2027E also stands out. The bank announced an interim cash dividend of around €120m, to be paid in December from profits accumulated for financial year 2026, representing a payout ratio of 57%.