What’s new? We consider OPAP a solid pick for risk averse investors, not least thanks to its dividend policy. Notwithstanding the UKR-RUS war conflict impact, we believe late speculation on the government’s intention to raise winning taxes has been weighing negatively on the stock. The reason this matters is because it affects the recycling of winnings and therefore GGR numbers. Not to mention incentivizing illegal gaming migration. We were not aware of government’s intentions when we tried to decipher the reasons behind OPAP’s unexciting share price performance in our previous note (Feb 14).

What’s new? Q4/FY 2021 results did not include any surprises. Eurobank delivered 8% of adjusted RoTE, +100bps higher than originally guided but in line with the run-rate witnessed up to 9M results. Guidance for 2022 was broadly unchanged for 10% RoTE /E0.13 EPS, including a quantified 20% dividend payout out of 2022 earnings; while fresh 2024 target is for 10% RoTE, implying +13% avg annual EPS growth. The important point is that the 2022-2024 business plan does not account at all for the UKR-RUS war currently raging and its consequences on the macro landscape or asset quality driven by higher energy prices and the potential of stagflation. In this sense, analyzing the guidance is rather meaningless.

What’s new? Jumbo provided a trading statement for the month of February, own estimates for Q1 2022 and the actual gross margin, EBITDA, and net cash numbers for FY 2021. In the paragraphs that follow we provide our view on all these.

What’s new? OTE revised its shareholder remuneration policy, announced along FY 2021 results. The telecom operator will be paying 70%-100% of annual reported free cash flow (from 100% previously) while splitting the payment equally between cash dividend and buybacks (from 65%/35% previously). The payment for 2022 will be E500m (was E480m in 2021) out of reported cash flow of E600m (83% payout), out of which E250m as cash dividend and an equal amount via buybacks. The lower payout is explained by the need to save cash to smooth future payments, which will be burdened with FTTH capex. The higher buyback portion was not explained. We speculate it relates to DT raising its current 49.2% stake higher than under the previous policy.

In this note we are addressing the main themes surrounding Greek Banks. Part of the note is in Q&A form. Themes include new lending, DTA, interest rates and valuation. We present our estimates for 2022-2024 in the spreadsheet attached.
The power of momentum. What GR banks lack in mass, they make up for in velocity. They have stormed into 2022, with their share prices up by an average 25% YTD. Out of all the possible reasons why, none is more convincing to us than their low P/TBV multiples at the end of 2021 and the so-called ‘January effect’. The fact they are all up by the same rate, implies they are treated like a single investment case.