Last Update 08 Jan 26

Fair value Increased 2.61%

BBVA: Growth Markets And AI Partnership Will Support Medium-Term Stability

Analysts have lifted their price target on Banco Bilbao Vizcaya Argentaria to €19.14 from €18.65, reflecting updated assumptions for slightly higher revenue growth, a modestly lower discount rate, and a higher future P/E multiple, consistent with recent upward target revisions from several research firms.

Analyst Commentary

Street research has recently focused on updated price targets and refreshed coverage for Banco Bilbao Vizcaya Argentaria, giving you a clearer view of how professionals are thinking about valuation, growth potential, and execution risks.

Bullish Takeaways

Bullish analysts have lifted price targets into the €19 to €22.40 range, which signals that their valuation work supports share prices above recent target levels.
Some see the bank's exposure to growth markets and diversified group structure as a positive for sustaining core revenue, which feeds directly into their earnings and P/E assumptions.
Expectations for continued strong core revenue are a key driver in the higher targets, as this supports the case for higher net profit over time if execution stays on track.
The combination of raised targets and positive ratings suggests confidence that the current business mix can support the updated earnings and P/E frameworks used in their models.

Bearish Takeaways

More cautious analysts see limited upside to current consensus earnings estimates, which caps how far they are willing to push their price targets.
An Equal Weight stance reflects a view that the current valuation already embeds much of the expected performance, leaving less room for positive surprise.
The €19 target from more neutral research points to a tighter margin of safety, with less buffer if revenue or profit trends come in below expectations.
This cautious camp highlights that while growth and diversification are strengths, they also introduce execution risks if conditions in key markets or segments do not line up with forecasts.

What's in the News

Banco Bilbao Vizcaya Argentaria and OpenAI have entered into a broad AI-focused alliance, with joint investments and shared objectives after nearly two years of working together. The initiative is aimed at reshaping customer experience and internal productivity using OpenAI models and talent (Key Developments).
The alliance includes plans for an intelligent conversational assistant to support customers in their financial day to day, as well as tools to help relationship managers provide more personalized service and streamline risk analysis processes (Key Developments).
BBVA plans to deploy ChatGPT Enterprise across the organization and is developing a digital alter ego assistant for employees that learns individual work styles, remembers projects, and executes tasks with authorization and oversight (Key Developments).
The bank is working to integrate its products and services directly into ChatGPT, and has already shown a demo of a ChatGPT integrated app for its digital banks in Italy and Germany (Key Developments).
From July 1, 2025 to September 30, 2025, BBVA reported no share repurchases. The bank confirmed completion of a buyback of 266,831,099 shares, about 4.42% of its capital, for €2,203m under the program announced on March 24, 2023 (Key Developments).

Valuation Changes

The fair value estimate has risen slightly from €18.65 to €19.14 per share, reflecting modest tweaks to the underlying model inputs provided.
The discount rate has edged down slightly from 9.23% to 9.18%, implying a small change in the required return used in the valuation work.
The revenue growth assumption has moved up marginally from 8.85% to 8.89%, indicating a very small adjustment to expected top-line expansion in the model.
The profit margin assumption has slipped slightly from 28.89% to 28.85%, pointing to a modestly more cautious view on future profitability levels.
The future P/E multiple has risen from 11.86x to 12.15x, suggesting a higher valuation multiple applied to forecast earnings within the updated framework.

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Key Takeaways

Strong emerging market presence, digital transformation, and sustainability focus are set to drive revenue growth, improve efficiency, and boost long-term profitability.
Enhanced capital management and stable interest rates should unlock shareholder value and support ongoing improvements in return on equity.
Heavy exposure to volatile emerging markets, regulatory and competitive pressures, and execution risks threaten BBVA's revenue growth, profitability, and efficiency improvement ambitions.

Catalysts

About Banco Bilbao Vizcaya Argentaria

Provides retail banking, wholesale banking, and asset management services primarily in Spain, Mexico, Turkey, South America, rest of Europe, the United States, and Asia.What are the underlying business or industry changes driving this perspective?

BBVA is well-positioned to benefit from the continued expansion of the middle class and rising financial inclusion in high-growth emerging markets like Mexico and Turkey, fueling sustained loan growth and fee-generating activity-positively impacting top-line revenue and long-term earnings potential.
The bank's ongoing investment and leadership in digital transformation-including increased AI-driven productivity and cost-containment initiatives-should drive further cost efficiencies, improve customer acquisition, and enhance net margins over time.
BBVA's ambitious strategy to grow its ESG and sustainable finance business, evidenced by record sustainable finance channeling and a €700 billion financing target by 2029, is expected to open new revenue streams and attract capital, supporting core revenue growth and long-term returns.
Expected stabilization of interest rates across BBVA's core markets (notably Spain and Mexico), after a recent period of rate declines, positions the bank to translate strong activity and loan growth directly into bottom-line profit improvement-bolstering net interest income and earnings.
Regulatory-approved simplification of risk models (notably IRB model changes) and capital management innovations are set to release significant CET1 capital and optimize RWA density, enabling increased capital returns to shareholders and supporting return on equity growth.

Banco Bilbao Vizcaya Argentaria Earnings and Revenue Growth

Banco Bilbao Vizcaya Argentaria Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Banco Bilbao Vizcaya Argentaria's revenue will grow by 7.9% annually over the next 3 years.
Analysts assume that profit margins will shrink from 32.2% today to 28.9% in 3 years time.
Analysts expect earnings to reach €11.4 billion (and earnings per share of €2.15) by about September 2028, up from €10.1 billion today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting €12.6 billion in earnings, and the most bearish expecting €9.4 billion.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 10.6x on those 2028 earnings, up from 8.8x today. This future PE is greater than the current PE for the US Banks industry at 9.6x.
Analysts expect the number of shares outstanding to remain consistent over the next 3 years.
To value all of this in today's terms, we will use a discount rate of 9.6%, as per the Simply Wall St company report.

Banco Bilbao Vizcaya Argentaria Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

BBVA's heavy reliance on emerging markets, particularly Mexico and Turkey, exposes it to elevated political, currency, and macroeconomic volatility; slower-than-expected recovery, persistent inflation, or sharp currency depreciations (especially in Turkey and Argentina) could erode revenue growth and create earnings volatility across the group.
Sustained or sharper-than-assumed declines in interest rates in core markets like Spain and Mexico could further compress net interest margins; if rates remain structurally lower than management forecasts, BBVA's ability to grow core revenues and bottom-line profit could be constrained.
Accelerating competition from digital native banks and fintech players-especially in Mexico, where challenger banks are growing deposit bases-could disrupt customer acquisition, erode market share, and lead to fee and net interest income compression, impacting revenue and net margin.
Regulatory pressures-including higher capital and liquidity requirements (e.g., implementation of Basel IV, operational risk charges, DORA regulation)-may force BBVA to retain more capital and reduce flexibility for shareholder returns; additionally, further ESG and sustainability-related compliance may add to operational costs and weigh on return on equity.
Execution risk remains significant as BBVA pursues organic and inorganic growth (including the Sabadell integration and ambitious digital transformation and AI deployment targets); failure to capture anticipated cost/income efficiencies or achieve targeted synergies could increase cost-to-income ratios and dampen earnings growth.

Valuation

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

The analysts have a consensus price target of €16.003 for Banco Bilbao Vizcaya Argentaria 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 €18.0, and the most bearish reporting a price target of just €11.7.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be €39.4 billion, earnings will come to €11.4 billion, and it would be trading on a PE ratio of 10.6x, assuming you use a discount rate of 9.6%.
Given the current share price of €15.43, the analyst price target of €16.0 is 3.6% 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.

BBVA: Earnings Momentum And Digital Banking Expansion Will Shape Outlook