Has ING Groep’s 41.5% Rally in 2025 Gone Too Far?

• Wondering whether ING Groep shares still offer value, even after their hot streak? Let’s dive into the factors driving its price and what they mean for savvy investors like you.
• ING Groep’s stock has seen a remarkable run, up 41.5% year-to-date and posting a 54.6% gain over the last twelve months, despite a pullback of 6.4% this past week.
• News around robust European banking sector performance and improving macroeconomic sentiment has kept ING Groep in the headlines. Market chatter has focused on its expanding digital platforms and resilient loan portfolio. These factors have played a big part in fueling recent price swings, attracting both long-term believers and short-term traders alike.
• According to our valuation check, ING Groep scores a 2 out of 6 on being undervalued, suggesting there’s nuance behind the headline numbers. Next, we will walk through how these valuation methods stack up and why the big picture might matter even more than you expect.

ING Groep scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: ING Groep Excess Returns Analysis

The Excess Returns valuation estimates a company’s true intrinsic value by examining how efficiently it puts capital to work. It weighs critical figures, such as the rate of return on equity, against the cost of equity, and takes into account long-term growth in book value and earnings. This approach is especially relevant for banks because balance sheet management and sustained profitability play a major role in valuations.

In ING Groep’s case, recent analyst forecasts highlight a Book Value of €16.84 per share and a Stable EPS of €2.41 per share, based on return on equity estimates from 15 analysts. Its Cost of Equity is estimated at €1.13, resulting in an Excess Return of €1.27 per share. The company’s Average Return on Equity stands at 13.41%. Looking forward, analysts expect a Stable Book Value of €17.95 per share, using projections aggregated from nine expert sources.

Applying these figures, the Excess Returns model values ING Groep at an intrinsic discount of 53.5% to its current share price. This suggests the stock is significantly undervalued relative to its ability to generate profit from its book value over time.

Result: UNDERVALUED

Our Excess Returns analysis suggests ING Groep is undervalued by 53.5%. Track this in your watchlist or portfolio, or discover 901 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for ING Groep.

Approach 2: ING Groep Price vs Earnings

The Price-to-Earnings (PE) ratio is widely regarded as a reliable valuation tool for profitable companies, as it shows how much investors are willing to pay for each euro of earnings. This makes it especially useful for banks like ING Groep, where steady profits support meaningful PE comparisons.

It is important to remember that what constitutes a “fair” PE ratio depends not just on recent profits, but on the market’s outlook for growth and any perceived risks. Companies with higher expected growth and lower risk typically command higher PE multiples, while those with greater uncertainties or slower growth trade at lower ratios.

Currently, ING Groep trades at a PE ratio of 12.48x. This is above both the average for European banks (10.02x) and the peer group (9.32x). However, Simple Wall St’s proprietary Fair Ratio for ING Groep, which accounts for the company’s future earnings growth, profit margins, risk profile, and industry characteristics, is calculated at 12.29x. Unlike simple peer or industry comparisons, the Fair Ratio blends these nuanced factors to offer a more holistic sense of value that is tailored to ING Groep’s specific outlook.

With ING Groep’s actual PE ratio just slightly above the Fair Ratio (12.48x versus 12.29x), the stock appears fairly valued based on this metric.

Result: ABOUT RIGHT

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1413 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your ING Groep Narrative

Earlier, we mentioned there is an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is a simple, story-driven approach where you lay out your own perspective on a company by connecting your assumptions, such as future revenue, profit margins, and the fair value you believe is justified, with an actual financial forecast.

This means that instead of relying solely on static ratios or consensus estimates, you can capture the full story behind ING Groep’s numbers and see how your expectations compare to other investors. Narratives directly link the story you believe about ING Groep to a calculated fair value, helping you make smarter buy or sell decisions by measuring how the share price stacks up against your own or the community’s fair value.

Narratives are easy to access and update on the Simply Wall St platform, where millions of investors share and revise them within the Community page. They stay live and dynamic; every time fresh data is released, or headlines break, Narratives update automatically to help you keep pace with new insights.

For example, the most optimistic ING Groep Narrative currently values the bank as high as €27.92 per share on the back of public investment and digitalization. In contrast, the most conservative narrative puts fair value near €17.50, focusing on margin pressure and regulatory headwinds. This demonstrates how different stories lead to different investment decisions.

Do you think there's more to the story for ING Groep? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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