Societe Generale's Ongoing Operating Malaise Still Weighs On The Valuation

I’ve flagged France’s Societe Generale (OTCPK:SCGLY) (“SocGen”) as a potential value trap for some time now, despite its low valuation and my own ownership of some shares, and the shares have borne that out – the local shares are down about 40% over the last year (the ADRs are down about 45%), underperforming French peers like BNP Paribas (OTCQX:BNPQY), Natixis (OTCPK:NTXFF), and Credit Agricole (OTCPK:CRARY), not to mention a host of European peers.

Although SocGen still appears significantly undervalued on many metrics, the fact is that the company’s performance continues to be uninspiringly weak and it’s difficult to see how management will change that in the foreseeable future. While very patient, very long-term-oriented investors may still find some value here, and valuation may well be bottoming out, the company’s ongoing restructuring efforts will continue to create headwinds for revenue and profit growth.

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Societe Generale's Ongoing Operating Malaise Still Weighs On The Valuation