In a report released this morning, KBW analysts explain that several factors are currently working in favor of French banks, including internal initiatives to improve performance, robust balance sheets, and attractive stock market valuations. These elements lead them to take a more positive view of French institutions.

Regarding BNP Paribas specifically, the American bank points to an improving investment thesis, with the group visibly stepping up efforts to strengthen its capital base and boost profitability, aiming for a return on tangible equity (RoTE) of around 13%.

Stock Still Undervalued, Say Analysts

Given that investors are increasingly focused on credit quality, the New York firm believes BNP is well positioned in this area thanks to its solid balance sheet, which should allow it to better manage any potential challenges ahead.

While not an immediate catalyst, the firm also expects the strategic update scheduled for early 2027 to be a positive factor, noting that management is targeting a cost/income ratio around 50% and a profitability ratio near 15% in the long term.

Finally, in terms of valuation, the stock does not appear expensive, KBW concludes, as it currently trades at about 0.95 times tangible book value. Based on a 13% RoTE and a 2028 adjusted P/E of 6.4x, these attractive levels justify the upgrade in recommendation.

Shortly before 12:30 p.m., BNP Paribas shares were up 0.6% on strong volumes, outperforming a CAC index down 0.4%. Due to unrest in Iran, the stock is down 8% this week but still posts gains of 8.4% since the start of the year, making it one of the best-performing blue-chip stocks on the Paris index in 2026.