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Will BBVA's share price decline?

Assuming that BBVA’s valuation de-rates to its historical mean over the coming quarters, its share price may decline to around $7.6 per share, which represents a downside of about 25% compared to its current share price.

Is BBVA risk-reward more biased to the downside?

This shows that BBVA risk-reward proposition is more biased to the downside, as the bank’s current P/BV valuation is near its historical highs, while lower revenue and earnings in the near future are likely to put pressure on BBVA’s valuation.

Should you buy BBVA (BBVA)?

Declining interest rates in Spain and Mexico are expected to compress net interest margins, leading to lower revenues and earnings, contrary to market optimism. BBVA's valuation is likely to revert to historical mean levels, suggesting a potential 25% downside, making it a compelling short play in the European banking sector.

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