Foreign investors are showing strong interest in Greek banks, according to a JP Morgan note, despite their significant performance, with a -100% increase in the index since June 22, compared to -30% for the SX7P.
JP Morgan underlines that Greek banks are currently trading at 0.7x P/TBV and 6x P/E based on 2025 estimates, not far from the levels of European banks which are historically considered as a technical upper limit.
The three key factors accounting for this ongoing outperformance, according to JP Morgan are:
1) Demand for Greek assets remains high, as reflected in recent market transactions, with upward macroeconomic prospects, low domestic political risk, and positive catalysts.
2) Consensus earnings per share (EPS) expectations for banks continue to surpass a low starting point (+12% on average in 2024).
3) Greek banks appear to be -40% cheaper than their counterparts in CEEMEA (Central and Eastern Europe, Middle East, and Africa), the most relevant benchmark from an index perspective, which JP Morgan considers a significant technical support factor for the sector compared to mid-term valuations of European banks.
