ING (ENXTAM:INGA) Valuation: Is There Still Upside After a Strong 45% Year-to-Date Rally?

ING Groep (ENXTAM:INGA) shares have moved only slightly in recent days, as investors consider how the company’s stock performance compares to the broader sector. The past month has brought a 7% gain, adding to an already strong year.

See our latest analysis for ING Groep.

While ING Groep's shares have ticked up over the past month, the bigger story is the impressive momentum seen throughout the year. A solid year-to-date share price return is supported by strong 1-year total shareholder returns, which suggests that investor confidence in the bank’s growth prospects is continuing to build.

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But with shares up nearly 45% year-to-date, the key question remains: is ING Groep still undervalued relative to its fundamentals, or are investors already pricing in all of the bank’s future potential?

Most Popular Narrative: 21.3% Undervalued

According to PittTheYounger, the fair value estimate for ING Groep stands noticeably higher than the last close at €21.96, hinting at substantial upside. The narrative positions ING as a rare opportunity among banks adapting swiftly to changing revenue streams.

Additionally, ING is among the sector leaders when it comes to trying to pivot away from NII as the predominant factor of profits. Instead, the industry in general and the Dutch bankers in particular aim to reap an ever higher share of income from fees for various services, including client wealth management, M&A activities, and debt underwriting. The past quarter demonstrates that ING has made ground in this effort at exactly the right time, while still standing to profit from the aforementioned EU investment initiative.

Read the complete narrative.

Wondering what kind of financial projections can justify such a premium? The narrative leans on bold growth assumptions and a profit outlook usually reserved for market leaders. Find out how these expectations mesh with ING’s new business model, revealed only in the full story.

Result: Fair Value of €27.92 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, if interest rates decline further or if EU investment momentum fades, the outlook for ING Groep could quickly look less rosy.

Find out about the key risks to this ING Groep narrative.

Another View: Looking at Valuation Multiples

Switching from fair value estimates to a practical multiple, ING Groep trades at 12.9 times earnings, which is noticeably higher than both European peer banks at 9.8x and the Dutch peer average at 9.7x. This premium suggests investors may already be factoring in optimistic growth, raising questions about potential upside from here.

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own ING Groep Narrative

If you take a different view or prefer to reach your own conclusions, the data is there for you to build a personal narrative in just a few minutes. Do it your way

A great starting point for your ING Groep research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

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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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