**Eurobank Emerges as Top Choice Amid Upgraded Price Targets for Greek Banks**
Eurobank has been identified as the leading choice among Greece's four major systemic banks, following an upgrade in estimates and price targets by Euroxx, a prominent brokerage. The upgrade is based on the banks' robust performance in the second quarter, enhanced earnings forecasts, and a more favorable interest-rate environment.
In a recent report shared by the Greek business outlet Newmoney, Euroxx maintained an Overweight recommendation for all four systemic banks, which also include the National Bank of Greece, Alpha Bank, and Piraeus Bank. The brokerage raised its price targets for these banks by an average of approximately 20 percent.
Specifically, Eurobank saw its price target increase significantly from €5.30 to €6.30, reflecting a potential upside of 32 percent. The National Bank of Greece's target was adjusted from €19.40 to €22, indicating a 26 percent upside. Alpha Bank's target rose from €5.20 to €5.80, representing a potential gain of 23 percent, while Piraeus Bank's target increased from €11 to €13, implying a 21 percent return.
Euroxx's analysis suggests that Greek banks are now positioned to trade at a premium compared to their European counterparts, a shift from the current discount reflected in their valuations. The brokerage noted that Greek lenders are benefiting from stronger credit expansion, a supportive macroeconomic environment, higher returns on equity, and more attractive shareholder distributions than those seen in other European banks.
Based on these factors, Euroxx estimates that the Greek banking sector could justify a premium of about 15 percent over European banks. The fair value of Greek banks is projected at around 13 times expected earnings for 2027, compared to current sector valuations of approximately 11.3 times expected earnings for 2026, 10.2 times for 2027, and 9.2 times for 2028.
The forecast for returns on tangible equity across the sector is also positive, with expectations of an increase from 15.6 percent in 2026 to 16.4 percent in 2027, and further to 16.9 percent in 2028. Euroxx has also raised its earnings forecasts by a mid-single-digit percentage following the second-quarter results, estimating that net profits across the sector could grow at an average annual rate of about 10 percent through to 2028.
Credit expansion is expected to remain the primary driver of growth, with corporate banking continuing to generate demand for new lending. Additionally, early signs of recovery in residential mortgages are emerging, indicating a broader market recovery. The increased lending volumes are anticipated to help mitigate gradual pressure on net interest margins as the interest-rate cycle evolves.
Future growth in the banking sector is not expected to rely solely on net interest income. Euroxx has identified higher fee income and other non-interest revenue as strategic priorities for the banks. The brokerage pointed out that healthy growth in commissions could complement lending expansion and help sustain profitability at elevated levels.
Eurobank, in particular, stands out due to its relatively low earnings valuation and strong regional presence. It is currently valued at 11 times estimated earnings for 2026, 9.9 times for 2027, and 8.8 times for 2028. Its return on tangible equity is projected to rise from 16.5 percent in 2026 to 16.9 percent in 2028.
The National Bank of Greece is expected to achieve the highest return on tangible equity among the four banks in 2028, estimated at 17.2 percent. Both Eurobank and Piraeus Bank are forecasted to reach returns of 16.9 percent, while Alpha Bank is expected to record a lower return of 13.7 percent. Despite Alpha Bank's projected return being lower than its peers, Euroxx suggests that there is significant room for improvement.
The recent upgrades reflect Euroxx's outlook that Greek banks are entering a phase of sustained earnings growth, supported by stronger lending, improved profitability, and increased shareholder distributions. As the banking sector adapts to changing economic conditions, the outlook remains optimistic for these institutions, with Eurobank leading the way.