2024-04-18 13:13:17 ET
Summary
- Shares of French bank Societe Generale have badly lagged peers in recent years, not helped by very weak earnings in 2023.
- Recent woes have been driven in large part by its domestic retail banking business, though both market and bank-specific drivers of poor performance should ease in 2024.
- With the shares below 0.4x tangible book value, the market is not giving much credence to management's medium-term profitability targets, affording investors enough latitude should the bank fall short.
French universal banking giant Societe Generale ( OTCPK:SCGLY )( OTCPK:SCGLF ) ('SocGen' hereafter) has been a weak performer in recent years, meaningfully lagging both close French peers as well as the wider European financial space ( EUFN ) in that time. Indeed, SocGen's share price remains lower than it was five years ago, with the stock de-rating from a then-valuation of around 0.5x prior-year tangible book value to less than 0.4x currently....
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Societe Generale: A Good Deal Below 0.4x Tangible Book Value