INGA: Future Returns Will Depend On Sustained Profitability And Capital Return Execution

The analyst price target for ING Groep has inched higher to approximately EUR 23.30 from about EUR 23.28, as analysts factor in a slightly lower discount rate and modestly stronger long term earnings visibility. This aligns with a series of recent upward revisions to Street targets toward the mid EUR 20s.

Analyst Commentary

Street research continues to skew positive on ING Groep, with several bullish analysts nudging targets higher into the mid to high EUR 20s, even as a minority of more cautious voices trim expectations slightly. The balance of revisions highlights growing confidence in earnings durability and capital returns, offset by concerns around macro sensitivity and the sustainability of current profitability.

Bullish Takeaways

Bullish analysts are lifting price targets toward EUR 26, reflecting increased conviction that ING Groep can deliver above consensus returns on equity and sustain attractive capital distributions.
Recent upward revisions emphasize improved long term earnings visibility, as stable asset quality and disciplined cost control are expected to support resilient profitability across cycles.
Higher targets around EUR 25 to EUR 26 suggest confidence that ING Groep can execute on growth initiatives in core European markets, supporting multiple expansion from current levels.
The persistence of Buy and Overweight ratings signals that bullish analysts see the current valuation as discounting overly conservative scenarios on rates, fee growth, and credit costs.

Bearish Takeaways

Bearish analysts trimming targets into the low EUR 20s point to limited upside from current prices, arguing that the stock already reflects much of the rate and margin benefit.
Cautious views focus on execution risk around growth and digital investment, which could pressure efficiency gains if revenue momentum slows.
Some Sector Perform and Hold stances indicate concern that earnings normalization, particularly from lower net interest income tailwinds, could cap further multiple expansion.
Target reductions closer to EUR 22 to EUR 24.40 underscore worries that a weaker macro backdrop or rising funding costs could constrain loan growth and fee income, tempering upside to valuation.

What's in the News

Russian President Vladimir Putin has approved Citigroup's sale of its Russian banking unit to Renaissance Capital, following earlier Kremlin sign offs on exit deals for Goldman Sachs, Natixis and ING Groep's Russian operations (Bloomberg).
ING Groep has appointed Ida Lerner, currently CFO at Norwegian bank DNB, as its next chief financial officer, effective April 2026, with her role including a seat on the Management Board Banking following approval by the European Central Bank (company announcement).

Valuation Changes

Fair Value: nudged higher from approximately €23.28 to about €23.30, reflecting a marginally more constructive long term outlook.
Discount Rate: edged down slightly from around 6.30 percent to roughly 6.29 percent, implying a modestly lower perceived risk profile.
Revenue Growth: revised down a touch from about 9.97 percent to roughly 9.90 percent, signaling slightly more conservative top line assumptions.
Net Profit Margin: eased marginally from around 29.05 percent to approximately 28.97 percent, indicating a small reduction in expected profitability.
Future P/E: ticked up modestly from roughly 9.04x to about 9.09x, suggesting a slightly higher valuation multiple on forward earnings.

Digital banking investments, sustainable finance growth, and fee-based income expansion drive customer engagement, diversify revenues, and enhance resilience.
Cost efficiencies from digitalization and market trends in Europe underpin stable expenses, stronger margins, and improved profitability.
Persistent economic uncertainty, strict regulations, and margin pressures are constraining ING's revenue growth and limiting its ability to improve long-term profitability and returns.

Catalysts

About ING Groep

Provides various banking products and services in the Netherlands, Belgium, Germany, rest of Europe, and internationally.What are the underlying business or industry changes driving this perspective?

ING's sustained investments in digital banking platforms and the expansion of its mobile primary customer base enable the bank to capture higher customer engagement, increase cross-selling, and achieve lower attrition rates, which position it for above-market growth in customer revenues and improved operating margins over time.
Significant growth in green finance and sustainable lending, as evidenced by a 19% YoY increase in sustainable finance volumes, allows ING to benefit from regulatory support and access to new client segments, supporting long-term loan growth and improved risk-adjusted margins.
Strong volume growth in retail lending (notably mortgages) and customer deposits, together with ongoing demographic shifts in Europe (such as increased affluence and generational wealth transfer), are set to fuel future growth in core revenues, partially offsetting current margin headwinds.
Structural shift toward higher fee-based income-driven by fee income growth of 12% YoY and targeted expansion in payments, insurance, and wealth management-diversifies revenues and enhances earnings stability, leading to greater resilience and the potential for improved return on equity (ROE).
Accelerated cost efficiencies from ongoing digitalization initiatives-including AI-powered customer support, centralized app platforms, and operational restructuring-support lower cost-to-serve and enable stable or declining expense guidance, contributing to higher net margins and stronger earnings growth.

ING Groep Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming ING Groep's revenue will grow by 8.3% annually over the next 3 years.
Analysts assume that profit margins will increase from 24.5% today to 26.5% in 3 years time.
Analysts expect earnings to reach €6.6 billion (and earnings per share of €2.43) by about September 2028, up from €4.8 billion today. However, there is some disagreement amongst the analysts with the more bullish ones expecting earnings as high as €7.6 billion.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 9.6x on those 2028 earnings, down from 12.2x today. This future PE is lower than the current PE for the GB Banks industry at 10.9x.
Analysts expect the number of shares outstanding to decline by 4.73% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 6.24%, as per the Simply Wall St company report.

ING Groep Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Persistent macroeconomic and geopolitical uncertainty is suppressing long-term corporate loan demand, particularly in core European markets such as Germany, leading to subdued lending growth in Wholesale Banking and constraining overall revenue growth for ING.
ING's commercial net interest income (NII) is highly sensitive to foreign exchange volatility-recent euro appreciation led to significant negative impacts on both NII and total revenue; ongoing FX headwinds could continue to weigh on net margins and earnings.
Despite volume growth offsetting some margin pressure, ongoing margin compression in key products like mortgages (which have lower lending margins despite higher ROE) may limit future overall net interest margin expansion, capping profitability improvements.
The ongoing reliance on deposit-gathering campaigns-particularly in competitive markets such as Germany-poses risks of elevated funding costs and non-sticky balances; a less favorable competitive or rate environment could erode liability margins and suppress returns.
European banking regulation remains fragmented and non-harmonized, compelling ING to hold higher capital and pay higher taxes versus some cross-border peers; this not only raises structural costs but also limits its ability to fully optimize capital, putting longer-term pressure on returns and ROE.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of €21.709 for ING Groep based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of €25.7, and the most bearish reporting a price target of just €17.5.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be €24.9 billion, earnings will come to €6.6 billion, and it would be trading on a PE ratio of 9.6x, assuming you use a discount rate of 6.2%.
Given the current share price of €20.61, the analyst price target of €21.71 is 5.1% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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