Revenue contraction reverses by Q3, re-rating P/E above 10x
Loan loss provisions stabilize, P/E expands to 9.5x by Q4
Restructuring completes by Q4, boosting core NII by 5%
Recent Daily Analysis
— The explosive 6.8% rally in Société Générale is a classic macro-driven head-fake, not a sign of fundamental improvement. Our hypothesis is that this move is a speculative bet on a steepening European yield curve, driven by shifting ECB policy expectations, which would artificially boost the bank's net interest margin. This completely ignores the company-specific data, namely a catastrophic -1411% DCF gap that points to a deeply challenged business model. The mechanism is pure interest rate sensitivity, where a macro tide temporarily lifts a sinking ship. This makes the rally exceptionally fragile. If upcoming Eurozone inflation data comes in hot and forces the ECB to walk back its dovish tone, this entire move will likely reverse, snapping focus back to the bank’s grim operational reality.