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Societe Generale SA ADR SCGLY

Morningstar Rating
$5.24 −0.10 (1.87%)
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Company Report

Societe Generale: Low Profitability Justifies Discount Compared With Peers

We increase our fair value estimate slightly for Societe Generale by 3% to EUR 29.30 per share, from EUR 28.50 per share. Our medium-term revenue estimates are in line with guidance and we expect a recovery in 2024 revenue as we don't expect further losses from Societe Generale’s interest-rate hedging program. Societe Generale’s 2026 cost/income target of below 60% looks aggressive, especially given the higher cost base that we expect from agreed salary increases. Societe Generale looks cheap compared with the sector, although its profitability is also materially below that of its rivals. Societe Generale’s lower profitability constrains the potential for higher dividend payouts and share buybacks; which is in sharp contrast to many of its peers who offer high shareholder distribution yields.

Price vs Fair Value

SCGLY is trading at a 17% discount.
Price
$5.34
Fair Value
$5.60
Uncertainty
Very High
1-Star Price
$88.50
5-Star Price
$2.70
Economic Moat
Pncn
Capital Allocation
Mxpq

Bulls Say, Bears Say

Bulls

SocGen has bolstered its capital materially.

Bears

Socgen has not outearned its cost of capital for the better part of a decade.

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News

Trading Information

Previous Close Price
$5.34
Day Range
$5.215.28
52-Week Range
$4.325.84
Bid/Ask
$5.18 / $5.32
Market Cap
$20.86 Bil
Volume/Avg
318,628 / 333,475

Key Statistics

Price/Earnings (Normalized)
6.52
Price/Sales
0.46
Dividend Yield (Trailing)
6.95%
Dividend Yield (Forward)
6.95%
Total Yield
26.89%

Company Profile

Founded in 1884, Societe Generale is one of France's major banks. It was historically viewed as primarily a corporate and investment bank, but it has meaningful retail banking operations in France, Eastern Europe, and North Africa.
Sector
Financial Services
Industry
Banks - Regional
Stock Style Box
Large Value
Total Number of Employees
126,000

Competitors

Valuation

Metric
SCGLY
ACA
BNP
Price/Earnings (Normalized)
6.526.8410.09
Price/Book Value
0.300.600.69
Price/Sales
0.461.821.34
Price/Cash Flow
1.291.733.90
Price/Earnings
SCGLY
ACA
BNP

Financial Strength

Metric
SCGLY
ACA
BNP
Quick Ratio
Current Ratio
Interest Coverage
Quick Ratio
No chart available

Profitability

Metric
SCGLY
ACA
BNP
Return on Assets (Normalized)
0.30%0.24%0.32%
Return on Equity (Normalized)
6.88%6.45%7.33%
Return on Invested Capital (Normalized)
Return on Assets
SCGLY
ACA
BNP
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Banks - Regional Industry Comparables

Ticker
Name
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
BNPQY
BNP Paribas ADRFmsmslfwWxzm$79.6 Bil
USB
U.S. BancorpSyrkcwfdSxgp$64.8 Bil
ISNPY
Intesa Sanpaolo ADRJyzwjqsvxzQtfbn$64.7 Bil
PNC
PNC Financial Services Group IncZdrxhfrkThrkkpr$59.5 Bil
ITUB
Itau Unibanco Holding SA ADRCjmtqxpkyHdplf$56.9 Bil
MFG
Mizuho Financial Group Inc ADRZwxvscyRbc$50.2 Bil
TFC
Truist Financial CorpRzknlfnWkyvz$49.0 Bil
LYG
Lloyds Banking Group PLC ADRRrcnjhsqNzyjp$40.5 Bil
DB
Deutsche Bank AGTdfhsQgxq$31.2 Bil
NWG
NatWest Group PLC ADRVgkclQzgcw$30.1 Bil

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