September looms as a risk month for stocks, Yardeni says
On Tuesday, Societe Generale (EPA:SOGN) SA (GLE:FP) (OTC: OTC:SCGLY) saw its price target increased by Jefferies to €55.00, up from the previous target of €45.00. The firm has reaffirmed its Buy rating on the bank’s stock. Jefferies’ analysts project that Societe Generale is well-positioned to achieve the higher end of its expected 9-10% Return on Tangible Equity (ROTE) by 2026, a more optimistic view than the consensus, which hovers at the lower end of the target range.
The upward revision in the price target is accompanied by an 8% increase in the earnings estimates for 2025 and 2026. Jefferies also introduced a 2027 ROTE estimate of 11.6%, which assumes Societe Generale will successfully reduce its cost-to-income ratio by 10 percentage points by 2027. This operational efficiency, according to the analysts, will be a key driver in achieving the higher ROTE.
Jefferies’ analysis suggests that Societe Generale can anchor its capital distributions to a 13% Common Equity Tier 1 (CET1) ratio. This would potentially allow for €7.7 billion in incremental buybacks, which Jefferies believes could elevate the bank’s tangible book value (TBV) per share by 36% by the end of 2027.
Currently, Societe Generale’s shares are trading at 0.6 times the estimated TBV per share for 2025. The increase in the price target to €55 reflects Jefferies’ confidence in the bank’s future financial performance and capital return strategy.
The firm’s analysis indicates that Societe Generale is on a solid path to deliver robust shareholder returns, underpinned by a strong capital position and a commitment to operational efficiency. With the price target set significantly higher, Jefferies signals its belief in the value proposition offered by Societe Generale to its investors.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.