BNP Paribas Earnings: Solid Results Support Our Bullish View

BNP Paribas recorded a strong rebound in its first-quarter 2024 earnings, comfortably beating the company-compiled consensus estimates of revenue, operating expenses, and credit costs. Along with Lloyds Bank, BNP is one of our preferred names for investors who want to invest in European banks. We believe BNP's discount rating relative to the average valuation of the European banking sector is unjustified. We expect BNP's midcycle profitability to lag the European banking sector average slightly, but BNP has one of the most stable earnings track records of the European banks that we cover. Given its lower interest rate sensitivity, we view BNP as a defensive option in the face of potentially lower interest rates.