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Greek Equity Strategy – 2026 outlook | Less beta, more selectivity

Fundamentals taking over – Greek equities delivered an exceptional performance in 2025, emerging as one of the strongest markets globally, with the ASE General Index up c50%. This marked the 4th consecutive year of outperformance vs the Euro Stoxx 600, a streak not witnessed in the past two decades. The magnitude of the 2025 rally inevitably sets a high base heading into 2026 (especially since the ASE is already up c6% ytd). As a result, we believe the market will transition from a beta-driven phase to a more discriminating, fundamentals-led environment, with 2026 likely shaping up as a stock-picker’s market, where earnings visibility and quality will matter far more than multiple expansion. Encouragingly, the macro backdrop remains supportive, with GDP growth set to remain above 2%, providing a solid foundation for corporate profitability. We expect another year of healthy earnings expansion, with operating profit growth of 8% for non-financials (following 8% in 2025e) and c5% growth in NII for banks (following -5% in 2025e).

Valuations still compelling but mostly on a relative basis – The sharp re-rating of the past few years has largely normalized GR equity multiples, with forward multiples now consistent with mid-cycle conditions, suggesting no outright deep value being offered in absolute terms, with the easy valuation upside behind us. However, the relative case remains compelling, as Greek equities continue to trade at >20% discount vs EU peers despite clear convergence in ROE and balance-sheet strength. The implied almost 2pps incremental risk premium embedded in the Greek market vs Stoxx 600 leaves, in our view, scope for further convergence toward European valuation benchmarks, albeit solely incremental rather than another phase of aggressive multiple expansion.

Technicals likely to stay supportive in 2026 – Investor positioning is still light, with foreign institutional net flows being slightly negative in 2025, despite the ASE’s hefty returns. This suggests meaningful dry powder remains on the sidelines. In addition, Greece now sits on multiple watchlists for potential upgrade to Developed Market status, ensuring a dense sequence of review points in the next 18 months. With passive outflow implications likely to be more relevant topic in 2027, the more important near-term read-through is the gradual broadening of the active investor base, particularly among global and EU-only mandates that structurally avoid EM exposure.

c16% 12m upside for the ASE; overweight banks in H1, overlay catalyst-rich names and profit compounders – Our bottom-up valuation indicates c16% upside (total return) for the ASE driven by a mix of re-rating (100bps ERP compression) and profit growth (c6% overall). From an allocation standpoint, we favour an overweight stance on banks in H1, where we expect the bulk of incremental positioning and re-rating to materialise, while acknowledging that performance is increasingly linked to broader EU sector dynamics. Piraeus remains our top pick in this space (solid delivery, capital build-up, cheap valuation), with BoC our second option (dividend play). Beyond banks, we favour a focused overlay of non-financials with visible earnings trajectories and idiosyncratic drivers. Our top picks include Metlen (profit reset, unwinding of technical headwinds, low valuation), and MOH (strong refining margin backdrop and efficiencies from prior year investments). With this note we also replace Jumbo (absence of immediate catalyst) and Titan (massive outperformance since Nov, still a Buy) with GEKTERNA (earnings step-up with ramp-up of recently acquired concessions). In the mid/small-cap space, we see plenty of valuation upside vs our baseline for PERF (Sponsored Research). Following the completion of our EBRD-funded research project and a reallocation of resources, we have recalibrated our coverage universe, with several stocks moving outside our active research focus. In addition, we suspend coverage on ATHEX, as valuation is now driven by Euronext pricing dynamics rather than stand-alone fundamentals.