September looms as a risk month for stocks, Yardeni says
In light of these developments, Goldman Sachs has raised its target price-to-earnings (P/E) multiple for Societe Generale (OTC:SCGLY) from 5.75x to 6.5x. The revised 12-month price target stands at EUR 43.25, up from the prior EUR 29.00, as the firm expects the bank to meet its financial targets and maintain a strong performance. Despite the increased price target, the firm’s stance on Societe Generale remains Neutral. The stock currently trades at a price-to-book ratio of 0.41, indicating potential value for long-term investors. For comprehensive valuation metrics and additional insights, investors can access over 12 exclusive ProTips available on InvestingPro. The stock currently trades at a price-to-book ratio of 0.41, indicating potential value for long-term investors. For comprehensive valuation metrics and additional insights, investors can access over 12 exclusive ProTips available on InvestingPro.
The fourth-quarter results showed stronger-than-anticipated revenues, particularly in the Corporate Investment Banking (CIB) division, encompassing both Global Markets and Financing & Advisory services. Additionally, Societe Generale reported lower-than-expected operating and credit costs.
Goldman Sachs highlighted that Societe Generale’s profitability guidance for greater than 8% return on tangible equity (ROTE) in 2025 is slightly above the pre-results consensus of 7.6%. The bank’s 2026 ROTE guidance of 9%-10% also surpasses expectations, which previously stood at 8.6%.
Societe Generale’s shares experienced a significant increase, closing up 13% on the day the results were announced. The stock’s momentum remains strong, with InvestingPro data showing impressive returns of 17.34% in the past week and 70.66% over six months. The bank’s robust performance in the fourth quarter has led analysts to anticipate that it will achieve its ROTE goals. Goldman Sachs analysts project continued outperformance in the Global Markets, further cost reductions, and disciplined capital allocation across the Group. Technical indicators suggest the stock is currently in overbought territory, trading near its 52-week high of $7.67.
In light of these developments, Goldman Sachs has raised its target price-to-earnings (P/E) multiple for Societe Generale from 5.75x to 6.5x. The revised 12-month price target stands at EUR 43.25, up from the prior EUR 29.00, as the firm expects the bank to meet its financial targets and maintain a strong performance. Despite the increased price target, the firm’s stance on Societe Generale remains Neutral.
In other recent news, Societe Generale SA’s stock rating has been upgraded from Equalweight to Overweight by Barclays (LON:BARC) analyst Amit Goel, who also increased the price target to EUR41.00 from EUR30.00. This upgrade reflects the potential for significant valuation improvement if the bank meets its target of a 9-10% return on tangible equity by 2026. Since the release of its third-quarter 2024 results, Societe Generale’s stock performance has seen a significant uptick, outperforming several of its peers with an increase of over 27%.
This upward trend is attributed to recent management changes and the bank’s improved earnings and capital trajectory. Despite the recent gains, Goel suggests that investing in Societe Generale shares could still be favorable as the bank is projected to have one of the best earnings per share growth trajectories into 2026, yet remains one of the most undervalued among European banks.
According to Barclays’ analysis, if Societe Generale can meet its 2026 ROTE target, the valuation could indicate more than a 50% potential upside for the stock. This is based on an assumed fair price-to-tangible book value ratio of 0.6-0.8x, with a cost of equity of 12-14% on the targeted ROTE. Investors have observed Societe Generale’s shares outperforming the broader Stoxx Europe 600 Banks Index, further highlighting the bank’s strong relative market position following its recent strategic and financial updates.
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