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On Tuesday, JPMorgan analyst Delphine Lee upgraded Societe Generale (EPA:SOGN) SA (GLE:FP) (OTC: OTC:SCGLY) stock rating from Neutral to Overweight and significantly raised the price target from €29.00 to €46.00. The upgrade comes as the $31.57 billion market cap bank has demonstrated remarkable momentum, with InvestingPro data showing a 40.53% year-to-date return and trading near its 52-week high. Lee’s decision follows a period of strong performance by Societe Generale’s shares over the past four months, citing several factors that contributed to the positive reassessment.
The bank’s shares have benefitted from clearer visibility on capital and improved communication strategies. Notably, the change in the Chief Financial Officer (CFO) and a revised approach to capital return were highlighted as unexpected developments that have positively influenced the bank’s valuation.
Despite the recent strong performance, Lee noted that Societe Generale’s stock still trades at a relatively modest 5.6 times price-to-earnings ratio (current P/E of 8.64x according to InvestingPro) and half of net asset value (Price/Book of 0.43x) for a return on net asset value of 9.4% expected in 2026. The market, according to Lee, is still underestimating the positive trends in the Corporate and Investment Banking (CIB) sector, the improved profitability of Boursorama Bank, and the group’s enhanced asset quality. InvestingPro subscribers have access to 12 additional key insights about Societe Generale’s valuation and growth prospects.
Looking forward, JPMorgan anticipates that Societe Generale has further potential for re-rating based on three key factors. First, the bank is expected to surpass return on tangible equity (ROTE) targets with more than 8% in 2025 and between 9-10% in 2026, which is 6-9% above Bloomberg consensus earnings per share estimates. Second, the bank’s capital return is projected to be one of the highest in the sector, with a forecasted annual yield of approximately 12% for fiscal years 2025-2027 (current dividend yield: 1.77%), including exceptional share buybacks of €1 billion per annum. Lastly, the current implied cost of equity at 19% does not reflect the bank’s structurally stronger capital, balance sheet, and asset quality. With a beta of 1.44, investors should note the stock’s higher volatility compared to the market.
The new price target of €46.00 is based on a sum-of-parts valuation as of December 2026 and implies a 22% upside from the current levels. JPMorgan concludes that Societe Generale is positioned to outperform within a sector that has already witnessed substantial gains.
In other recent news, Societe Generale has reported stronger-than-anticipated fourth-quarter revenues, especially in its Corporate Investment Banking division, which includes Global Markets and Financing & Advisory services. The bank also revealed lower-than-expected operating and credit costs. Following these results, Goldman Sachs has increased its price target for Societe Generale from EUR 29.00 to EUR 43.25, while maintaining a Neutral stock rating. Goldman Sachs noted that Societe Generale’s profitability guidance, with a return on tangible equity (ROTE) greater than 8% in 2025 and 9%-10% in 2026, exceeds previous expectations.
Additionally, Barclays (LON:BARC) analyst Amit Goel upgraded Societe Generale shares from Equalweight to Overweight, raising the price target to EUR 41.00 from EUR 30.00. This upgrade reflects the potential for significant valuation improvement if the bank meets its 2026 ROTE target. Barclays highlighted Societe Generale’s strong stock performance since its third-quarter 2024 results, attributing this to management changes and improved earnings and capital trajectory. Both Goldman Sachs and Barclays analysts see potential for continued strong performance and valuation improvement for Societe Generale.
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