Morgan Stanley has reaffirmed its positive stance on the Greek banking sector despite the strong rally in bank stocks over recent years on the Athens Stock Exchange.
In its latest European banking sector report ahead of second-quarter earnings, the U.S. investment bank maintains a constructive outlook on Greek lenders, arguing that they continue to offer an attractive combination of profitability, valuation and shareholder returns compared with many of their European peers.
Alpha Bank and Piraeus Lead Morgan Stanley’s Preferences
Morgan Stanley continues to rate Alpha Bank, Eurobank and Piraeus Bank as Overweight, while maintaining an Equal-weight recommendation on National Bank of Greece (NBG) and CrediaBank.
Among the Greek banks under coverage, Alpha Bank and Piraeus Bank offer the strongest upside potential.
The broker maintains a €4.90 price target for Alpha Bank and €11.30 for Piraeus Bank, implying potential upside of approximately 24% for both stocks.
For Eurobank, Morgan Stanley reiterates its €4.90 price target, representing an estimated upside of around 18%.
Meanwhile, the investment bank sets a €17.20 target price for National Bank of Greece, suggesting upside of roughly 14%, while maintaining an Equal-weight rating and a €1.16 target price for CrediaBank.
Attractive Valuations Despite the Rally
Despite the significant appreciation in Greek bank shares over the past several years, Morgan Stanley believes the sector continues to trade at attractive valuation levels.
According to the bank’s comparative analysis, Greek lenders trade at an average of around 8.8 times estimated 2027 earnings, a multiple that remains below those of several major European banking markets.
At the same time, the sector is expected to generate an average Return on Tangible Equity (ROTE) of approximately 17.6%, placing Greek banks among the most profitable institutions in Europe.
Strong Dividend Outlook
Dividend prospects also remain supportive of the investment case.
Morgan Stanley forecasts an average dividend yield of around 5.6% in 2027, with distributions expected to increase further in 2028 as banks continue to strengthen their capital positions and enhance shareholder returns.
The combination of solid earnings generation, capital strength and rising dividend payouts continues to attract both domestic and international investors seeking income alongside capital appreciation.
Focus Turns to Second-Quarter Earnings
Investor attention is now shifting toward the upcoming second-quarter and first-half earnings season.
Markets will closely monitor the evolution of net interest income, loan growth, fee and commission income, as well as updated management guidance for profitability, capital generation and shareholder distributions through 2027.
Analysts will also assess how Greek banks navigate a gradually declining interest-rate environment while sustaining profitability and maintaining strong returns on equity.
A Positive Investment Case Remains Intact
Morgan Stanley concludes that, despite their impressive stock market performance in recent years, Greek banks continue to rank among Europe’s most profitable and attractively valued banking sectors.
With robust capital ratios, industry-leading profitability and improving shareholder remuneration, the sector remains well positioned for further investor interest, with Alpha Bank and Piraeus Bank standing out as Morgan Stanley’s preferred investment opportunities within the Greek banking universe.