Societe Generale SA is now the cheapest bank in Europe by a key valuation measure, and yet there are fewer analysts who recommend buying the stock even after this week’s slump.
(Bloomberg) — Societe Generale SA is now the cheapest bank in Europe by a key valuation measure, and yet there are fewer analysts who recommend buying the stock even after this week’s slump.
The shares trade at 0.3 times the company’s estimated book value — dipping just below Deutsche Bank AG. The French lender’s market value has shriveled to less than €19 billion from about €73 billion 15 years ago, and is a far cry from French rival BNP Paribas SA’s €75 billion.
SocGen slumped 12% Monday after the bank cut its revenue and profitability targets and guided for lower payouts to shareholders. Analysts at HSBC Holdings Plc and BNP Paribas Exane downgraded SocGen to hold-equivalent ratings on Tuesday despite the low valuation, indicating that the bargain price would do little to entice investors.
“It will get better but not as fast as we expected,” wrote BNP Paribas Exane analyst Guillaume Tiberghien. “2024 now feels more like a year of transition than the year of delivery we expected.”
The bank’s shares on Monday also erased their gain for the year, lagging behind the 14% rise in the euro zone banks index. SocGen has 13 buy, 12 hold and 1 sell ratings, according to data tracked by Bloomberg.
–With assistance from Thyagaraju Adinarayan.
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