The Greek stock market is no longer the «cheap» market it was in previous years, but it remains a market with a strong investment narrative, positive inflows, and a significant presence in the portfolios of investors focused on emerging markets, according to Bank of America. .
According to the British bank HSBC, Greece and Euronext Athens are the European markets where funds are most significantly overweight.
JP Morgan is expressing confidence in the Greek market by upgrading Greek stocks to «overweight» and seeing room for new capital inflows, driven by index rebalancing, banks, and attractive valuations. It estimates that passive inflows resulting from the Greek market’s inclusion in the Stoxx Europe 600 index will total approximately $1.015 billion.
Most of the funds are expected to go to Greek banks, with National Bank of Greece projected to attract inflows of $288.6 million, Eurobank $232.5 million, Piraeus Bank $220.1 million, and Alpha Bank $146.6 million.
Significant inflows are also expected for PPC, Metlen, OTE, GEK TERNA, and Aegean Airlines, a development that, according to JP Morgan, is expected to boost liquidity and investor interest in the Greek stock market.
This positive assessment is also based on the ongoing improvement in the fundamentals of the Greek economy. The fiscal outlook has strengthened significantly, with public debt declining faster than initially projected and Greece having made early repayments on loans from the support programs.
JP Morgan also attributes a catalytic role in the market’s outlook to MSCI’s decision to reclassify Greece as a developed market by 2027. This development is seen as an important step toward restoring confidence following the 2013 downgrade.
Market Valuation
In HSBC's comparative valuation table, the Greek stock market appears to be trading at a discount, despite the strong rally that preceded it.
The Athens Stock Exchange has an estimated price-to-earnings (P/E) ratio for the next 12 months of approximately 10.8 times, a level significantly lower than that of several major international stock exchanges.
Mainland China is also trading at 10.8 times earnings, while markets such as Qatar, Poland, the United Arab Emirates, Hungary, Brazil, and Turkey. India is trading at a P/E ratio of 21.3 times, Taiwan at 20.5 times, and the Czech Republic at 16 times.
Goldman Sachs notes that the Greek market’s P/E ratio stands at 10.5x, its P/B ratio at 1.5x, and its dividend yield at 4.8%. At the same time, it forecasts earnings per share (EPS) growth of 12% both this year and in 2027.
Despite the rally, the Greek market continues to trade at a discount relative to European markets. According to Optima, the price-to-earnings ratio for 2026 has risen to 12.3 times, from 10.4 times in January, yet it remains at a discount of 22% relative to European markets. Similarly, the enterprise value-to-operating profit ratio stands at 8.4 times, at a discount of 13%, while the Athens Stock Exchange’s dividend yield is estimated at 3.8% for 2026, higher than the European average.
Banks Are Still Attractive
Despite the rally in bank stocks in recent years, Morgan Stanley believes that their valuations remain attractive, as they are trading at a P/E ratio that is approximately 10% lower than that of the European banking sector.
Greek banks are trading, on average, at about 8.8 times their estimated 2027 earnings, a level lower than that of several major European markets. At the same time, the projected return on equity (ROE) stands at approximately 17.6%, one of the highest in Europe.Furthermore, the average dividend yield is estimated at 5.6% in 2027.
J.P. Morgan argues that the discount on Greek banks relative to Western European banks is excessively large and is not justified by fundamentals. As it notes, Greek banks are trading at a forward P/E ratio of 9.6 times for the next 12 months, compared to 10.6 times for European banks, despite a significant improvement in their profitability and capital ratios.
According to UBS, Greek banks are trading at a discount.The four major Greek banks continue to trade at a discount of approximately 12% in terms of the P/E ratio compared to European banks (FY27E), at 9.2x compared to 10.4x for Europe and up to 10.9x for Spain/Portugal, while we believe that Greek banks could trade closer to European banks.
UBS estimates that Greek banks can converge with European valuations through credit expansion and by leveraging their accumulated capital.
Strong second-quarter performance and the upward revision of business targets by the management teams of Greek banks have led Goldman Sachs to revise its estimates for the sector, confirming that Greek banks remain among the most attractive investment options in Europe.
The Banks' New Narrative
Morgan Stanley notes that Greek banks have entered a new phase of growth, in which profitability is no longer based solely on the interest rate environment.
The increase in lending, the growth in commissions, the resilience of net interest income, and high capital adequacy are the key pillars of the new investment narrative.
Moody’s has given a new «vote» of confidence in Greek banks and believes that the Greek banking story still has a long way to go and that the next chapter will rely less on balance sheet consolidation and more on organic growth. Continued credit expansion, diversified fee income, low funding costs, and cost discipline are expected to keep earnings strong in 2026–2027, even if there are new pressures on interest rate margins.
Moody’s estimates that total net profits for the first half of the year amounted to 2.5 billion euros. This performance was driven by credit expansion, an acceleration in commission income, and the containment of credit risk costs.
Of particular significance is the reversal of the trend in net interest income. Across the four banks, net interest income rose by 4.6% year-over-year to 4.3 billion, following the decline in 2025.
