BBVA: Still A Buy After An Impressive Share Price Performance

Banco Bilbao Vizcaya Argentaria (BBVA) reported strong H1 results, with net profit up 8%, and provided robust 2025-2028 guidance targeting a 22% ROTE and rising dividends, alongside plans for €48B in net income and substantial distributions. The bank's ongoing bid for Banco de Sabadell is identified as a potential growth driver, though a higher offer might be necessary to secure the deal. Despite the stock's recent performance, BBVA's underlying fundamentals continue to support a 'buy' recommendation.

Analysis

Banco Bilbao Vizcaya Argentaria (BBVA) has demonstrated strong financial performance and a robust forward-looking strategy, according to its recent disclosures. The bank's H1 results featured an 8% year-over-year increase in net profit, providing a solid foundation for its ambitious 2025-2028 guidance. Key targets include achieving a 22% Return on Tangible Equity (ROTE) and generating €48 billion in cumulative net income over the period. This outlook is further supported by a commitment to shareholder returns through rising dividends, disciplined capital allocation, and share buybacks. A significant potential growth catalyst is the ongoing bid for rival Banco de Sabadell, although the article notes that a successful acquisition may necessitate a higher offer. Despite the stock's significant appreciation, the author's analysis concludes that strong underlying fundamentals continue to support a bullish case for the bank.

Key Decisions for Investors

• Given the strong H1 performance and robust long-term guidance targeting 22% ROTE and significant capital returns, investors may view the fundamental case for BBVA as compelling.
• Closely monitor the progress of the bid for Banco de Sabadell, as a successful acquisition represents a key growth catalyst, while the terms of the deal could impact future capital allocation.
• For investors who have benefited from the stock's significant run, it may be prudent to review position sizing for diversification, even as the positive fundamental outlook and shareholder return policies could justify maintaining exposure.