On Wednesday, Citi analysts increased their price target on shares of Banco Bilbao (NYSE:BBVA) Vizcaya Argentaria SA (BBVA:SM) (NYSE: BME:BBVA) to EUR 12.60, up from the previous target of EUR 12.00, while reaffirming a Buy rating for the stock. The adjustment reflects the bank's strong performance, with shares showing significant gains year-to-date and over the past three months, outpacing the Stoxx Europe 600 Banks Index (SX7E) by 4 to 9 percentage points.
The analysts highlighted that BBVA's share price surge has raised expectations for the fourth quarter results due on January 30. They anticipate that the management will provide new insights into the strategies that could sustain BBVA's earnings growth and return on tangible equity (ROTE) in 2025. This guidance is expected to align with previous indications, despite the challenges posed by declining interest rates in Spain and a weakening Mexican Peso to Euro exchange rate.
Should the bank's guidance confirm these expectations, it could signal over a 10% upside to the 2025 consensus earnings per share (EPS) estimates among Visible Alpha analysts. The analysts underscored BBVA's valuation as still attractive, trading at less than 7 times the 24-month forward price-to-earnings ratio and 1.2 times book value, considering a projected 17% ROTE for the 2025-26 period.
The Citi analysts concluded their statement by reiterating their Buy rating, with the new price target of EUR 12.60 based on revised earnings estimates for Banco Bilbao Vizcaya Argentaria SA. This reassessment comes as the bank prepares to share its fourth-quarter results and forward-looking guidance, which will be closely watched by investors and industry observers alike.
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