BG: Earnings Strength And Capital Returns Will Drive Further Upside

Analysts have slightly reduced their price target for BAWAG Group to EUR 146 from EUR 149. This reflects a modestly lower long term revenue growth outlook, partially offset by expectations of stronger profit margins and a lower future valuation multiple.

Analyst Commentary

Bullish analysts continue to view BAWAG Group favorably, with recent target price revisions reinforcing confidence in the bank's earnings resilience and capital return story. While the latest adjustment reflects slightly tempered long term growth expectations, the overall stance remains constructive.

Recent research updates highlight that the current share price still implies a discount to analysts' estimates of fair value, supported by solid profitability metrics and disciplined cost control. The maintained positive ratings signal that, in analysts' view, the recent moves in the target price are more a reflection of fine tuning assumptions than a change in the core investment thesis.

Bullish Takeaways

• Target prices in the low to mid EUR 100s suggest material upside from current trading levels, indicating that bullish analysts see BAWAG Group as undervalued on both earnings and book value multiples.
• Positive ratings maintained alongside target adjustments point to continued confidence in management execution, particularly on cost efficiency and capital allocation.
• Incremental target price increases earlier in the year underscore an improving earnings trajectory and growing comfort with the bank's ability to deliver sustainable growth.
• The combination of robust profitability and a supportive capital position is viewed as a key catalyst for further re rating potential, especially if BAWAG Group continues to exceed return on equity targets.

What's in the News

• BAWAG Group issued earnings guidance for 2025, expecting to exceed its targets of EUR 800 million net profit and earnings per share of more than EUR 10 (company guidance).
• BAWAG Group was added to the FTSE All World Index, increasing its visibility and potential ownership among global index tracking investors (index announcement).

Valuation Changes

• Fair Value: edged down slightly from approximately €148.47 to €148.20 per share, reflecting a modest reduction in the intrinsic value estimate.
• Discount Rate: decreased marginally from about 7.01 percent to 6.95 percent, indicating a slightly lower assumed cost of equity or risk profile.
• Revenue Growth: reduced significantly from roughly 14.59 percent to 11.96 percent, pointing to a more conservative long term growth outlook.
• Net Profit Margin: increased slightly from around 42.82 percent to 43.03 percent, implying a small improvement in expected profitability.
• Future P/E: moved lower from about 12.5x to 11.33x, suggesting a reduced valuation multiple applied to forward earnings.