Expectations For Societe Generale Have Dropped To A Point Where Outperformance Seems More Likely

There’s long been a line of thought in investing that there’s a price where almost any stock can be attractive, provided the business is a going concern. I don’t quite believe that (I’ve seen stocks languish for a decade or more), but I do believe that Societe Generale (OTCPK:SCGLY) has shored up its capital position and has finally started tackling some of its more significant lingering operational problems.

Even for a bank that generates such low returns, SocGen shares look undervalued, and I believe the expectations bar has been set so low for this bank that the odds favor some level of outperformance. The macro environment is a risk, particularly with the ECB now going back to easing, but it looks to me as though European banks in general, and SocGen in particular, has derated to a point where just “okay” performance would generate some upside.

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Expectations For Societe Generale Have Dropped To A Point Where Outperformance Seems More Likely