BNP Paribas disappoints shareholders. On Thursday, February 1, the share price of the bank of Rue d’Antin (France’s leading financial institution by market capitalization) fell significantly (-9.21%), in large transaction volumes. Financial analysts and equity investors have chastised the lower-than-expected earnings forecast. In the fourth quarter of 2023, BNP Paribas’ net banking income (NBI, the difference between banking income and expenses) was 5% lower than the average expectation of financial analysts, and the share of the group’s net income was much lower than expected.
Furthermore, BNP Paribas’ outlook for 2025 is nothing short of attractive. Indeed, the average annual growth rate of the group share of income between 2022 and 2025 should be at least one percentage point lower than initial projections, against the backdrop of weaker-than-expected economic growth. Return on equity (financial return, for shareholders) should be lower than expected next year.
BNP Paribas, Crédit Agricole, Société Générale… Banks are taking off on the stock market, have they stopped?
Financial analysts risk slashing price targets on BNP Paribas shares
“weak“, reports UBS, while JPMorgan recalls performances “disappointing“. The American bank therefore expects financial analysts to lower their earnings forecasts (group share) and therefore lower their price targets for BNP Paribas shares, thus sustaining short-term selling pressures.
BNP Paribas shareholders will receive large dividends and benefit from share buybacks
Eager to take care of its shareholders, BNP Paribas has decided to increase its dividend per share by 18% to €4.60 (which is a comfortable dividend yield of close to 8% at the time of writing). BNP Paribas will also buy back its own shares for more than one billion euros, which will automatically increase earnings per share after the cancellation of the securities in question. A phenomenon that traditionally tends to increase share prices.
BNP Paribas shares are cheap on the stock market today
Beyond the current headwinds BNP Paribas stock, the value remains too discounted, according to most financial analysts. Royal Bank of Canada, buying shares, has a price target of €82, while UBS and JPMorgan, less ambitious, have around €70, a theoretical valuation that still offers good upside potential. Momentum, Capital’s stock market investment newsletter, will soon provide readers with an updated view of the potential of BNP Paribas shares in the stock market.
Beats BNP Paribas and Société Générale Crédit Agricole: stock market advice
BNP Paribas, Société Générale, Crédit Agricole… Which bank do you prefer in the stock market?
Within the French banking sector, Momentum was able to bet on the right horse, as our preference has long been in favor of Crédit Agricole shares (which has had a better track record than BNP Paribas and Société Générale since the beginning of 2024, at the time of writing this article). In addition, we recently issued a cautionary note on shares of Société Générale, which was stalled by a major chart barrier (technical analysis) in early January and has since declined significantly. Meet every day Time our scenarios on the CAC 40 and stocks. Take advantage of a free (and no-obligation) one-month trial with promo code CAPITAL30J. To register, click the link below.
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