National Bank of Greece (NBG) Stock Falls in After-Hours Trading on Political Unrest

NEW YORK (TheStreet) -- National Bank of Greece (NBG) shares are down 1.01% to $1.96 in after-hours trading as volatility in Greek politics hurt Greek stocks across the board this week. The stock fell 4.8% on more than double is average daily volume in intraday trading today.

Greek Prime Minister Antonis Samaras surprised investors on Monday when he called for a snap presidential election that could potentially elect a government that would rather default than pay back the $297 billion in Eurozone bailout loans the country has received over the past couple of years.

If Samaras' presidential candidate fails to win then snap national elections will be triggered with the left leaning and anti-bailout Syriza party most likely to win, according to the Globe and Mail.

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TheStreet Ratings team rates NATIONAL BANK OF GREECE as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate NATIONAL BANK OF GREECE (NBG) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • NBG's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 58.89%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Commercial Banks industry average, but is greater than that of the S&P 500. The net income increased by 9.8% when compared to the same quarter one year prior, going from -$92.93 million to -$83.82 million.
  • The revenue fell significantly faster than the industry average of 1.3%. Since the same quarter one year prior, revenues fell by 30.3%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • NATIONAL BANK OF GREECE reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, NATIONAL BANK OF GREECE turned its bottom line around by earning $1.98 versus -$27.80 in the prior year. For the next year, the market is expecting a contraction of 92.9% in earnings ($0.14 versus $1.98).
  • 36.50% is the gross profit margin for NATIONAL BANK OF GREECE which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -5.49% is in-line with the industry average.
  • You can view the full analysis from the report here: NBG Ratings Report
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