BNP Paribas offers biggest implied share price upside among Europe's top banks

BNP Paribas SA offers the greatest potential upside to its share price among large European banks, an analysis by S&P Global Market Intelligence shows.

The French banking group's implied upside to share price target was 31.4% as of Sept. 30, compared to a median of 15.2% for a sample of Europe's largest lenders. The implied upside is the percentage change between the Sept. 30 closing price and analysts' consensus price target.

BNP Paribas also had the highest implied upside at the end of the second quarter.

In this analysis, S&P Global Market Intelligence examined European bank stocks trading in relation to analysts' consensus price targets as of Sept. 30. Only stocks covered by at least three analysts were included.

French bank stocks have been negatively affected by the political turmoil in France that followed the June announcement of a snap election by President Macron. The macroeconomic and political uncertainty in the country poses downside risk for local banks that could persist for months, Flora Bocahut, co-head of European banks research at Barclays, told Reuters in September.

However, Deutsche Bank analysts believe that the rate-cutting cycle recently initiated by the European Central Bank could help French banks accelerate fee income and loan growth, and support net interest income in longer-duration markets and consumer finance.

"Given their business mix, this environment appears ripe, particularly for BNP Paribas and Crédit Agricole to outperform," the analysts said in a Sept. 18 note published by Dow Jones Newswires. Crédit Agricole SA had a potential upside to its share price of 18.7% as of Sept. 30.

Deutsche Bank analysts also raised their price target on BNP Paribas shares from €78 to €79 on Sept. 18 and kept their "buy" recommendation unchanged. Goldman Sachs and Barclays also reiterated their "buy" ratings for BNP Paribas in September, but HSBC downgraded the bank to "hold" from "buy" with a price target of €70. BNP Paribas shares traded at €61.44 on Oct. 7.

Both Morningstar DBRS and Fitch confirmed BNP Paribas Bank's ratings in June, citing the group's diversified business profile and resilient profitability. BNP Paribas' earnings per share is forecast to increase from €9.77 in 2024 to €10.24 in 2025 and €11.20 in 2026, according to analyst estimates compiled by Market Intelligence.

BNP Paribas posted a €3.39 billion net profit for the second quarter, almost 19% above analysts' expectations. Its equity and prime services business reported a more than 57% annual growth in revenue in the second quarter following a string of acquisitions in recent years.

The bank anticipates continued robust growth in its global markets division over the upcoming quarters, driven by its recent investments in the equity and prime services business.

Finland-based Nordea Bank Abp has the second-highest implied upside in the sample at 22.4%, followed by Spain's Banco Santander SA at 21.9%. Analysts expect Banco Santander to report EPS increases in both 2025 and 2026, while Nordea's EPS could stay flat year on year at €1.38 in 2026 after dropping from €1.44 projected for full year 2024.

While demonstrating the highest implied upsides, BNP Paribas and Nordea offered some of the lowest total returns in the sample in the last 12 months, at 8.7% and negative 0.4%, respectively. According to Jefferies analysts, Nordea remains one of the most attractive banking stocks in Europe as it continues to display high profitability and low earnings volatility, Dow Jones Newswires reported.

Sweden-based Skandinaviska Enskilda Banken AB (publ) and Norwegian lender DNB Bank ASA have the lowest potential upsides to their share price among the sampled banks, at 3.4% and 3.2%, respectively. The two banks' buy strength was also the lowest in the sample, at 29.4% and 23.5%, respectively.

Highest 1-year total returns

Meanwhile, Italy-based UniCredit SpA, which has been building its stake in German lender Commerzbank AG, offered the highest total return in the sample in the last 12 months, exceeding 82%. It was followed by Intesa Sanpaolo SpA and NatWest Group PLC, with one-year total returns of 66.4% and 55.7%, respectively.

All three lenders are projected to grow EPS in both 2025 and 2026.

Intesa's profitability will remain strong over the next few years despite falling interest rates, S&P Global Ratings said in July. "The group's earnings capacity, which we think is higher than that of EU bank peers, will likely provide it with enough funds to both remunerate shareholders and invest in digitalization to remain abreast of new technologies," Ratings said.

Intesa had the highest buy strength — the ratio of buy and overweight analyst recommendations to total number of recommendations — in the sample, at 85% as of Sept. 30, compared with a 56.3% median for the sample.

– Access consensus estimates for BNP Paribas on S&P Capital IQ Pro.  – Access the Peer Analysis template on S&P Capital IQ Pro.