National Bank of Greece (NBG) Stock Soaring on Greek Deal Concession Speculation

NEW YORK (TheStreet) -- Shares of the National Bank of Greece (NBG) are gaining by 5.83% to $1.18 in pre-market trading on Monday morning, as debt strapped Greece is said to have made a "potentially major" concession on pensions, sources told The Wall Street Journal.

Eurozone leaders received the country's proposal late and kept expectations of an immediate breakthrough in the stalled talks between Greece and its creditors low.

Greece and its creditors have been holding intense negotiations for months, with little resolution. One of the large factors weighing on talks was Greece's stance on pension funds, among other reforms.

The deal was formally submitted to creditors on Monday morning and outlines new pension savings and revenues worth 0.4% of gross domestic product for this year and 1% beginning in 2016, The Journal noted. The publication added that the new reform is close to the target Greece's creditors had previously demanded.

It is believed that Greece will run out of money by the end of June and with no extension to its current bailout funds the country could default on its 1.54 billion euro payment to the IMF.

TheStreet's Jim Cramer, portfolio manager of the Action Alerts PLUS Charitable Trust Portfolio had this to say, "NBG total crapshoot -needs to raise money badly, but no one cares, so they buy it."

Separately, 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 few notable weaknesses, 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. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, poor profit margins and weak operating cash flow."

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

  • NATIONAL BANK OF GREECE has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern earnings per share over the past two years. During the past fiscal year, NATIONAL BANK OF GREECE reported lower earnings of $0.15 versus $1.98 in the prior year.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Commercial Banks industry. The net income has significantly decreased by 168.5% when compared to the same quarter one year ago, falling from $249.36 million to -$170.78 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Commercial Banks industry and the overall market, NATIONAL BANK OF GREECE's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for NATIONAL BANK OF GREECE is currently lower than what is desirable, coming in at 28.20%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -11.29% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$385.60 million or 192.98% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • You can view the full analysis from the report here: NBG Ratings Report

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