Citi bullish on BNP Paribas and Société Générale ahead of quarterly results
In a note on European banks, Citi reaffirmed its "buy" ratings on BNP Paribas and Société Générale. The price target for the former was slightly adjusted from 103 to 102 EUR, while the target for the latter was raised from 82 to 84 EUR, as both lenders prepare to release their Q1 2026 earnings.
BNP Paribas among the sector's cheapest plays, says Citi
Regarding BNP Paribas, Citi forecasts a profit before tax (PBT) of 4.6bn EUR, 7% above company-compiled consensus, driven by stronger revenues (+2%) and lower provisions (-3%), with costs expected to remain in line.
The U.S. investment bank raised its 2026 EPS forecasts by 1% on the back of higher CIB (Corporate & Institutional Banking) revenues, but trimmed its 2027-28 estimates by 0% to 1% due to weaker earnings from CPBS (Commercial, Personal Banking & Services).
"BNP Paribas remains one of the most undervalued stocks in the sector, trading at a price-to-book ratio of 0.8x for a Return on Tangible Equity (RoTE) of approximately 12-13%, which we believe is too low," Citi noted, maintaining its buy recommendation.
Société Générale among Citi's top European picks
For Société Générale, Citi expects an adjusted PBT of 2.5bn EUR, 5% above consensus. This performance is anticipated to be driven by a 2% revenue beat and an 8% reduction in provisions, partially offset by a 2% increase in costs.
Citi raised its 2026 EPS forecasts by 2%, primarily reflecting higher equity trading revenues following the recent earnings reports from U.S. peers, while 2027-28 EPS estimates remain broadly unchanged.
"Société Générale shares have recovered from their March lows, but the price-to-book ratio remains depressed at 0.9x, which still appears too low given its RoTE," Citi stated, including the stock among its European "top picks."
BNP Paribas is France's largest banking group. Net banking product (NBP) breaks down by activity as follows:
- retail banking (50.8%): retail banking activity in France (24.2% of NBP), in Belgium (14%), and Italy (10.1%). The remainder of the NBP (51.7%) is from international activities and specialized financial services activities (consumer loans, real estate credit, leasing credit, car fleet management, computer equipment leasing);
- finance and investment banking (36.1%): consulting and capital market activities (83.2% of NBP; merger-acquisition consulting, activities related to the stock, interest, and exchange markets, etc.) and financing (16.8%; financing for acquisitions, projects, raw material transactions, etc.);
- institutional and private management and insurance (13.1%): asset management, private banking activity (No. 1 in France), real estate and on-line brokerage services, insurance and securities services (No. 1 in Europe for retained securities).
At the end of 2025, BNP Paribas was managing EUR 1,075.6 billion in current deposits and EUR 897.3 billion in current loans.
Net banking product is distributed geographically as follows: Europe/Middle East/Africa (80.8%), America (10.8%) and Asia/Pacific (8.4%).
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