With this research note we attempt to address the following issues surrounding the sector: a) what is the market discounting at current levels? b) Impact from the DTA forbearance, c) changes in the recap framework, d) a closer look at Eurobank’s capital increase and d) an update on warrants’ pricing and valuation..to access this report  contact@researchgreece.com

It seems Greece won’t be boring this year.  This report will try to explain how target prices of our covered universe would look like if Greece’s GDP grows by 3% in 2015 and 3-4% in 2016; risk free rate is set at 4%.

This is not our base case scenario. For those investors willing to play the Greek recovery theme we believe the best plays would be…to access this report  contact@researchgreece.com

The first exercise period is approaching. We have created a ‘Plug-and-Play’ calculator spreadsheet, which adjusts automatically for the days remaining. Readers can insert their own risk free/volatility assumptions for each bank and estimate the value of warrants…to access this spreadsheet  contact@researchgreece.com

Greek banks trade 1.3x P/TE on the back of a flow-driven  re-rating (3M: +55%) with no change in the DSA outlook. Credit quality remains the main challenge with Blackrock 2 and stress tests being the next catalysts. Economic/fiscal conditions have improved but the sovereign is still struggling. We reiterate our DOI rating on all banks covered… to access this report contact@researchgreece.com

The market appears to be too forward looking and perhaps too generous. Concluding on an implied 2014 P/E for our universe involves too many assumptions. Most of these assumptions are around banks and most importantly two years from now. Our universe could shed c14% as implied by our target prices; c10% for the total market. We conclude the market is not discounting earnings; it is discounting expectations. Banks are the buffer; market P/E moves meaningfully on >20% earnings surprise. We cover 70% of the total market cap – we rate all 16 companies as DON’T OWN IT…to access this report  contact@researchgreece.com