Last Update 04 Dec 25

Fair value Increased 3.15%

ALPHA: Margin Strength And Clean Balance Sheet Will Support Future Upside

Analysts have modestly reduced their price target on Alpha Bank from EUR 4.10 to EUR 4.00, citing slightly softer revenue growth expectations, offset by incremental improvements in profit margins and long term earnings multiples.

Analyst Commentary

Recent commentary around the revised EUR 4.00 price target highlights a balanced view of Alpha Bank's risk reward profile, reflecting both confidence in its strategic direction and acknowledgement of execution risks.

Bullish Takeaways

Bullish analysts point to the maintained Overweight rating as evidence that, despite the modest target cut, the bank's medium term upside remains intact relative to peers.
Improving profit margins and a cleaner asset quality profile are seen as supportive of higher through cycle returns on equity, helping to justify valuations near the top of the domestic banking sector range.
Progress on cost discipline and digital transformation is viewed as a key driver of operating leverage, potentially enabling earnings to grow faster than headline revenue over the next few years.
The relatively small reduction in target price is interpreted as a calibration to slightly softer macro and revenue assumptions, rather than a change in conviction about the bank's strategic execution.

Bearish Takeaways

Bearish analysts remain cautious on the sustainability of current margin strength, noting that competitive pressures and normalization in interest rates could weigh on net interest income over time.
There is concern that further rerating of the stock could be constrained if earnings upgrades stall, leaving limited room for multiple expansion from current valuation levels.
Execution risks around delivering on cost saving and digital initiatives, as well as maintaining asset quality in a slower growth environment, are highlighted as potential drags on long term earnings visibility.
The reduction in the price target, even if modest, is seen as a reminder that the outlook is sensitive to small changes in revenue growth assumptions and macro conditions.

What's in the News

Issued 2025 earnings guidance, targeting a medium term positive EPS growth trajectory that stands out compared with both domestic and European banking peers (company guidance)
Forecasts EPS growth of about 10% per year over the planning period, ahead of current market consensus even before the potential impact of share buybacks (company guidance)
Highlights that any future buyback program would provide additional upside to EPS beyond the already above consensus growth targets (company guidance)

Valuation Changes

The fair value estimate has risen slightly from €3.92 to €4.05, reflecting a modestly higher intrinsic value assessment.
The discount rate has edged down marginally from 10.92% to 10.91%, implying a very small reduction in the perceived risk profile.
The revenue growth assumption has fallen slightly from 19.18% to 19.08%, indicating slightly softer topline expectations.
The net profit margin has increased modestly from 39.69% to 40.50%, pointing to improved profitability assumptions.
The future P/E multiple has risen slightly from 10.38x to 10.52x, suggesting a small uplift in the valuation multiple applied to forward earnings.

Strategic partnerships and digital investments are broadening market reach, enhancing operational efficiency, and improving customer experience.
Strong capital base and reduced risk exposures support loan growth, market share expansion, and increasing profitability amid favorable regional economic trends.
Revenue and profitability are vulnerable to rate declines, rising competition, macro volatility, reliance on nonrecurring gains, and risks from acquisition integration.

Catalysts

About Alpha Bank

Provides various banking and financial products and services in Greece and internationally.What are the underlying business or industry changes driving this perspective?

Alpha Bank's strategic partnerships, notably with Hellenic Post (expanding nationwide physical/digital distribution) and UniCredit (cross-border asset management, syndicated lending, and advisory), position it to capture new customers, drive higher revenue from underserved geographies, and capitalize on sustained financial inclusion and the modernization of banking services-positively impacting revenue growth and diversification.
Ongoing investments in digital banking channels, IT infrastructure, and process optimization (leveraging UniCredit expertise) are improving operational efficiency and enhancing customer experience, which should support improved cost-to-income ratios and net margins over the medium-to-long term.
Continued reduction in Non-Performing Exposures (NPEs), supported by opportunistic asset sales and robust risk management, is lowering cost of risk ahead of plan, supporting EPS upgrades and paving the way for higher profitability and potential increases in shareholder distributions.
Alpha Bank's strong capital position and organic capital generation enable acceleration in profitable loan growth and selective bolt-on acquisitions, which can broaden its market share and diversify earnings, supporting both top-line growth and bottom-line resilience.
The solid structural growth outlook for Greece and Southeast Europe, combined with increasing demand for lending and fee-based services as these economies converge with Western Europe, ensures Alpha Bank is well positioned to benefit from macroeconomic tailwinds and higher recurring fee income, directly fueling future revenue and earnings expansion.

Alpha Bank Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Alpha Bank's revenue will grow by 17.4% annually over the next 3 years.
Analysts assume that profit margins will shrink from 43.7% today to 39.3% in 3 years time.
Analysts expect earnings to reach €1.1 billion (and earnings per share of €0.49) by about September 2028, up from €768.0 million today. However, there is some disagreement amongst the analysts with the more bearish ones expecting earnings as low as €985.2 million.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 9.8x on those 2028 earnings, down from 10.5x today. This future PE is lower than the current PE for the GB Banks industry at 10.3x.
Analysts expect the number of shares outstanding to decline by 0.53% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 10.99%, as per the Simply Wall St company report.

Alpha Bank Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Alpha Bank's revenue growth remains sensitive to downward pressures on net interest income (NII) from accelerated declines in interest rates, euro-dollar parity shifts, and ongoing competitive pressure on lending spreads, which could negatively impact core revenue generation and net margins.
Rising competition in the Greek and regional banking sectors-both from established peers and new entrants like fintechs-creates increased pressure on lending rates and underwriting selectivity, potentially reducing Alpha Bank's loan expansion and future revenue growth.
Ongoing macroeconomic volatility and the potential for adverse adjustments in macro assumptions may trigger additional provisioning needs for loan losses, especially if auditor-required technical provisions increase, thereby impacting future earnings and capital adequacy.
Heavy reliance on windfall, nonrecurring gains (such as deferred tax asset recognition and singular transaction-related fortifications of the balance sheet) may mask underlying risks or temporarily boost P&L; the reversal or absence of such one-offs in future periods could pressure reported profits, CET1 ratio, and earnings sustainability.
Acquisition-driven growth-while presenting opportunities-remains a risk if integration is not executed efficiently or if the capital consumption from recent and potential future "bolt-on" deals (e.g., Flexfin, AstroBank, AXIA) fails to generate the expected return on equity, pressuring both profitability and capital ratios.

Valuation

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

The analysts have a consensus price target of €3.534 for Alpha Bank 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 €4.1, and the most bearish reporting a price target of just €2.5.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be €2.8 billion, earnings will come to €1.1 billion, and it would be trading on a PE ratio of 9.8x, assuming you use a discount rate of 11.0%.
Given the current share price of €3.47, the analyst price target of €3.53 is 1.8% 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.

Analysts Lift Alpha Bank Price Target Amid UniCredit Stake Increase and Positive Valuation Shifts