BBVA Future Share Buybacks And Dividend Payouts Will Likely Disappoint

The analyst price target for Banco Bilbao Vizcaya Argentaria has been raised from EUR 12.38 to EUR 14.00 as analysts factor in stronger expected revenue growth, slightly higher future profitability and earnings multiples supported by the bank's exposure to faster growing markets.

Analyst Commentary

Recent Street research on Banco Bilbao Vizcaya Argentaria highlights a broadly constructive stance on the stock, with multiple Buy ratings and successive price target upgrades reflecting confidence in the bank's revenue trajectory and earnings power. Higher target prices in the EUR 18 to EUR 22 range suggest that many observers see further room for upside as BBVA benefits from its footprint in faster growing markets and diversified business mix.

In particular, the latest initiation from Goldman Sachs with a Buy rating and a price target above EUR 22 underscores expectations for sustained core revenue expansion, which is projected to support net profit growth over the medium term. This outlook is grounded in BBVA's exposure to growth markets and the perceived resilience of its earnings through the cycle.

At the same time, some coverage has turned more balanced, with at least one major firm opting for a neutral stance and highlighting limited upside to current consensus estimates. This mixed backdrop suggests that, while the consensus skew remains optimistic, there is also growing attention to potential execution challenges and macroeconomic sensitivities that could constrain further rerating of the shares.

Bearish Takeaways

• Bearish analysts argue that, after a strong share price performance and multiple target upgrades, much of the near term earnings momentum is already reflected in the valuation, leaving less room for positive surprises.
• Some see limited upside to consensus earnings forecasts, warning that potential benefits from higher interest rates could fade while cost pressures and credit normalization risks may cap profitability growth.
• Cautious views emphasize execution risk in growth markets, where political and regulatory uncertainty could affect the assumed pace of revenue expansion embedded in current price targets.
• Bearish analysts also flag the potential for macroeconomic volatility in BBVA's key geographies to trigger higher loan loss provisions, which could weigh on returns and challenge the sustainability of premium valuation multiples.

What's in the News

• BBVA and OpenAI sign a long-term strategic alliance to co create AI solutions for customers and employees, giving the bank preferential access to OpenAI models and talent and enabling integration of BBVA services into ChatGPT (Key Developments).
• The bank completes a €993 million share buyback tranche, repurchasing 54,316,765 shares, or 0.94 percent of share capital, under the program announced on April 7, 2025 (Key Developments).
• BBVA Board approves a cash interim dividend of EUR 0.32 gross per share on account of the 2025 dividend, payable on November 7, 2025, with ex dividend date on November 5 and record date on November 6 (Key Developments).
• A September 21, 2025 Board meeting is convened to consider improving the terms of BBVA’s offer for Banco Sabadell, including potential changes to the mix of shares and cash in the consideration (Key Developments).

Valuation Changes

• Fair Value Estimate has risen moderately from €12.38 to €14.00 per share, reflecting higher expected earnings and a somewhat richer valuation framework.
• Discount Rate has fallen slightly from 9.62 percent to about 9.16 percent, implying a marginally lower required return and higher present value for future cash flows.
• Revenue Growth has increased from roughly 6.95 percent to about 8.08 percent, indicating stronger assumptions for top line expansion over the forecast period.
• Net Profit Margin has edged up from around 25.13 percent to about 25.77 percent, signaling a modest improvement in expected profitability.
• Future P/E multiple has risen slightly from 9.7x to about 10.2x, pointing to a somewhat higher valuation being applied to forward earnings.