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Investing.com - UBS upgraded Societe Generale (OTC:SCGLY) SA (EPA:GLE) stock rating from Neutral to Buy and raised its price target to EUR62.00 from EUR51.00 following the bank’s second-quarter results.
The French banking group reported second-quarter profit before tax 16% above market expectations, driven by 10% better pre-provision profit with 2% higher revenues, 2% lower costs, and 6% better loan losses.
UBS cited improved costs and capital payouts as factors that should strengthen confidence in Societe Generale’s ability to improve return on equity and deliver premium earnings per share growth with higher distributed yields.
The investment bank forecasts Societe Generale will deliver the best EPS growth in the banking sector from 2025-2028 at 18% annually, while trading at a 14% price-to-earnings discount to the sector based on fiscal year 2027 estimates.
UBS’s new target price reflects higher earnings forecasts and an increased P/E multiple of 9.2x for fiscal year 2026 estimates, up from 8.1x previously, citing higher peer multiples and increased confidence in the bank’s sustained growth potential.
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