reports
- Johann Scholtz
Morningstar | Societe Generale 1Q: Disappointing Results, Announced Re...
No-moat Societe Generale, or Socgen, reported net profit of EUR 631 million for the first quarter of 2019. This is 26% lower than the EUR 850 million Socgen reported for the first quarter of 2018. Our current earnings estimate calls for flat earnings growth for the full year, and this is starting to look like a challenging target given the poor first-quarter results and the announced restructuring costs for the struggling investment banking franchise. We maintain our no-moat rating and EUR 33 fa...
- Johann Scholtz
Societe Generale 1Q: Disappointing Results, Announced Restructuring Ha...
No-moat Societe Generale, or Socgen, reported net profit of EUR 631 million for the first quarter of 2019. This is 26% lower than the EUR 850 million Socgen reported for the first quarter of 2018. Our current earnings estimate calls for flat earnings growth for the full year, and this is starting to look like a challenging target given the poor first-quarter results and the announced restructuring costs for the struggling investment banking franchise. We maintain our no-moat rating and EUR 33 fa...
- Johann Scholtz
Morningstar | Societe Generale Lowers Guidance
No-moat Societe Generale reported net income of EUR 3.9 billion for the 2018 fiscal year, somewhat stronger than the EUR 3.7 billion we had penciled in. Socgen did, however, reduce its previous guidance through to 2020. After incorporating the reduced guidance, we reduce our fair value estimate to EUR 33 per share from EUR 42 per share previously. In response to Socgen's revised guidance, we reduce our net income estimates for 2019 and 2020 by 8% and 17%, respectively. There are several main dr...
- Johann Scholtz
Morningstar | Societe Generale Lowers Guidance. See Updated Analyst No...
No-moat Societe Generale reported net income of EUR 3.9 billion for the 2018 fiscal year, somewhat stronger than the EUR 3.7 billion we had penciled in. Socgen did, however, reduce its previous guidance through to 2020. After incorporating the reduced guidance, we reduce our fair value estimate to EUR 33 per share from EUR 42 per share previously. In response to Socgen's revised guidance, we reduce our net income estimates for 2019 and 2020 by 8% and 17%, respectively. There are several main dr...
- Johann Scholtz
Societe Generale Lowers Guidance
No-moat Societe Generale reported net income of EUR 3.9 billion for the 2018 fiscal year, somewhat stronger than the EUR 3.7 billion we had penciled in. Socgen did, however, reduce its previous guidance through to 2020. After incorporating the reduced guidance, we reduce our fair value estimate to EUR 33 per share from EUR 42 per share previously. In response to Socgen's revised guidance, we reduce our net income estimates for 2019 and 2020 by 8% and 17%, respectively. There are several main dri...
- Johann Scholtz
Morningstar | Socgen's 3Q Results Flattered by Revaluation
No-moat Societe Generale reported underlying net income of EUR 1.3 billion for the third quarter, which represents a 16% increase year on year. However, the underlying number is flattered by the EUR 271 million revaluation of Socgen's interest in Euroclear, which was booked during the quarter. We maintain our EUR 42 fair value estimate and no-moat rating. French retail banking contributes around 30% of Socgen's net income, and it had flat earnings growth year over year as 2% revenue growth was ...
- Johann Scholtz
Socgen's 3Q Results Flattered by Revaluation
No-moat Societe Generale reported underlying net income of EUR 1.3 billion for the third quarter, which represents a 16% increase year on year. However, the underlying number is flattered by the EUR 271 million revaluation of Socgen's interest in Euroclear, which was booked during the quarter. We maintain our EUR 42 fair value estimate and no-moat rating. French retail banking contributes around 30% of Socgen's net income, and it had flat earnings growth year over year as 2% revenue growth was o...
- Johann Scholtz
Morningstar | Socgen 2Q 2018: Decent Results, Interesting Internal M&A...
No-moat Societe Generale reported net income of EUR 1.2 billion for the first quarter of 2018, which represents a 9% increase year on year. This was also 15% ahead of the EUR 1 billion consensus pencilled in for the quarter. At the end of first-half 2018, Socgen had attained half of our full-year 2018 net income estimate of EUR 3.6 billion. While our full-year estimate represents a 36% increase year on year, this is a reflection of Socgen's soft second-half 2017. We view the announcement that So...
- Johann Scholtz
Socgen 2Q 2018: Decent Results, Interesting Internal M&A Activity
No-moat Societe Generale reported net income of EUR 1.2 billion for the first quarter of 2018, which represents a 9% increase year on year. This was also 15% ahead of the EUR 1 billion consensus pencilled in for the quarter. At the end of first-half 2018, Socgen had attained half of our full-year 2018 net income estimate of EUR 3.6 billion. While our full-year estimate represents a 36% increase year on year, this is a reflection of Socgen's soft second-half 2017. We view the announcement that So...
- Johann Scholtz
French Banks: Clear Risks Not Reflected in Valuations
We have recently updated our economic moat ratings and fair value estimates for the French banking sector. We have downgraded our moat ratings for BNP Paribas and Credit Agricole to no-moat, we maintain our no-moat rating for Societe Generale, and we initiate coverage on Natixis with a no-moat rating. We maintain our respective fair value estimates for BNP Paribas and Credit Agricole at EUR 60, or 0.9 times tangible book value, and EUR 11, or 0.8 times tangible book value. We reduce our fair val...
- Johann Scholtz
Societe Generale remains a French bank with some emerging-market expos...
No-moat Societe Generale reported net income of EUR 850 million for the first quarter of 2018, which represents a 14% increase year on year. At first blush, this appears fairly decent; however, this was all due to sharply lower loan-loss provisions. Preprovison profits declined by 14%, with revenue tracking backwards by 3% and costs increasing by 4%. We believe that the market will increasingly focus on the preprovision result, as loan-loss provisions are now significantly below midcycle levels ...
- Johann Scholtz
Socgen 1Q18: Trading Drags Down Profits, but Retail Is the Major Disap...
No-moat Societe Generale reported net income of EUR 850 million for the first quarter of 2018, which represents a 14% increase year on year. At first blush, this appears fairly decent; however, this was all due to sharply lower loan-loss provisions. Preprovison profits declined by 14%, with revenue tracking backwards by 3% and costs increasing by 4%. We believe that the market will increasingly focus on the preprovision result, as loan-loss provisions are now significantly below midcycle levels ...
- Johann Scholtz
SocGen 3Q 2017 Hit Hard by Weak Trading Revenue
No-moat Societe Generale reported weak results with a 15% decline in net income for the third quarter of 2017 compared with the year-ago period. Low volatility hit trading revenue especially hard. We retain our EUR 54.50 fair value estimate and our no-moat rating. French retail banking experienced a 12% decline in net income. Net interest margins were under pressure from lower interest rates that put pressure on liability margins, as well as lower asset yields to due home loan renegotiations. In...
- Johann Scholtz
SocGen's French businesses are attractive, but overhead costs and loss...
No-moat Societe Generale reported decent underlying results on the back of mixed segment performances. The French retail banking operation saw a decline in net banking income as higher fee generation was offset by the impact of low interest rates, while the international retail segment benefited from strong business activity lifting net banking income 5.5% on constant exchange rates. On the back of the results, we maintain our fair value estimate at EUR 54 per share. In global banking and inve...
- Alex Morozov
SocGen's French businesses are attractive, but overhead costs and loss...
Societe Generale's first-quarter results were a mixed bag composed of growth in its business operations paired with higher provisions and settlements for previous disputes. The group posted net income of EUR 747 million and a return on equity of 5.2%, which includes a EUR 350 million provision for a settlement with the Libyan Investment Authority on a dispute dating back to before 2007 as well as the implementation impact of the IFRIC 21 accounting standard. On an adjusted basis, net income and ...
- Stephen Ellis
SoGen Reports Weak Fourth Quarter but Decent Full-Year Results; Shares...
Societe Generale reported decent full-year results, while the company faces headwinds from a challenging retail banking environment in France. We plan to maintain our $8/EUR 36 fair value estimate and no-moat rating. Despite a weak fourth quarter and group profits declining 33% compared with fourth-quarter 2015, SoGen achieved solid growth of 18% in adjusted net income for the full year. It made improvements on the net cost of risk, which declined 31% on an adjusted and constant exchange-rate ba...
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