Last Update 07 Feb 26

Fair value Increased 6.89%

INGA: Future Returns Will Depend On Execution Of Earnings And Cash Distribution Plans

Our fair value estimate for ING Groep has shifted from €24.69 to €26.39, with analysts pointing to recent price target increases and rating upgrades that reflect their views on volume growth prospects, profitability, and updated P/E expectations.

Analyst Commentary

Recent Street research on ING Groep has been active, with several firms updating views on the shares. Here is how bullish and cautious analysts are framing the story right now.

Bullish Takeaways

Bullish analysts are pointing to a constructive volume growth outlook, which they see as supportive for earnings and their higher fair value assumptions.
Several price targets have been set in the mid €20s, including a move to €25.80, which these analysts view as more aligned with their updated P/E expectations.
Recent upgrades to more positive ratings signal confidence that the current execution on the core banking franchise can support the higher valuation ranges they are using.
JPMorgan and other bullish analysts have raised their price targets in explicit euro amounts, indicating they see room for the shares to better reflect their updated assessment of earnings power.

Bearish Takeaways

More neutral analysts are initiating with a balanced stance, suggesting they want additional evidence on how volume growth and profitability trends translate into consistent execution before moving to a more positive view.
Cautious voices imply that while current P/E assumptions support fair value in the mid €20s, there may be limited room for multiple expansion without clearer visibility on growth and returns.
Some research framing ING Groep with a neutral view highlights that, despite target price increases elsewhere, the shares could already be closer to what these analysts consider a fair reflection of the current outlook.

What's in the News

Russian President Vladimir Putin approved Citigroup's sale of its Russian bank unit to Renaissance Capital, following earlier Kremlin approvals for exits by Goldman Sachs, Natixis and ING Groep from their Russian operations (Bloomberg).
ING Groep proposed a final cash dividend over 2024 of €0.736 per share, adding to the overall cash return profile for shareholders.
ING announced a special dividend of €0.172 per share, to be paid on 15 January 2026 as part of up to €1.6b in planned distributions, with the amount calculated on 2,902 million ordinary shares outstanding on 31 December 2025.
ING issued earnings guidance that, for 2026, points to expected total income of around €24b, supported by continued volume growth and an anticipated 5% to 10% increase in fee income.
For 2027, ING guided to total income expected to exceed €25b, at the upper end of its previous target range, with fee income now expected to exceed €5b.

Valuation Changes

Fair Value Estimate moved from €24.69 to €26.39, a modest upward shift in the modelled value per share.
Discount Rate edged up from 6.24% to 6.37%, reflecting a slightly higher required return in the updated assumptions.
Revenue Growth adjusted from 9.72% to 7.58%, indicating more measured growth expectations in the latest inputs.
Net Profit Margin refined from 28.07% to 29.70%, pointing to modestly higher expected profitability in the model.
Future P/E moved from 9.97x to 9.45x, implying a slightly lower valuation multiple in the current framework.

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.

Have other thoughts on ING Groep?

Create your own narrative on this stock, and estimate its Fair Value using our Valuator tool.

Create Narrative

How well do narratives help inform your perspective?

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.

Deposit Surge And Green Finance Will Shape Banking Performance Ahead