National Bank of Greece (NBG) Stock Surging on Last Minute Debt Talks

NEW YORK (TheStreet) -- Shares of the National Bank of Greece (NBG) are gaining by 8.90% to $1.06 in mid-morning trading on Tuesday, following reports that the Greek government and EU authorities are in last minute discussions regarding a deal to get the country to pay part of its debt and avoid a default.

Greece owes about $1.8 million (1.6 billion euros) to the International Monetary Fund. The deadline for that payment is tonight.

Greece's Prime Minister Alexis Tsipras is said to have called Jean-Claude Junker, the president of the EC, on Monday night in order to discuss the offer, BBC.com reports.

If Greece and its creditors cannot come to an agreement by tonight Greece will default on its IMF payment, which could lead to the country's exit from the Eurozone.

On Monday, Greece announced that its banks and stock market would be closed until July 6. Tsipras also announced a referendum scheduled for July 5, in order to allow Greece to vote on measures its creditors have demanded in return for more bailout funds.

Tsipras suggested if there was a yes vote he would no longer serve as Prime Minister, BBC.com noted.

"If the Greek people want to proceed with austerity plans in perpetuity, which will leave us unable to lift our head...we will respect it, but we will not be the ones to carry it out," Tsipras said, according to BBC.com.

 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 some concerns, 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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