Stock Analysis & Valuation Banco Bilbao Vizcaya Argentaria, S.A. (BOY.DE)

• Previous Close: €21.43
• Sector Valuation Confidence Level: High

Valuation method	Value, €	Upside, %
Artificial intelligence (AI)	25.20	18
Intrinsic value (DCF)	7.59	-65
Graham-Dodd Method	8.07	-62
Graham Formula	41.18	92

Strategic Investment Analysis

Company Overview

Banco Bilbao Vizcaya Argentaria, S.A. (BBVA) is a leading global financial services provider headquartered in Bilbao, Spain. Founded in 1857, BBVA operates as a diversified bank offering retail banking, wholesale banking, and asset management services across Spain, Mexico, South America, the United States, Turkey, and other regions. The bank provides a comprehensive suite of financial products, including current and savings accounts, loans, credit cards, insurance, and real estate services. With a strong digital focus, BBVA leverages online and mobile banking platforms to enhance customer accessibility. As of December 2021, BBVA maintained an extensive network of 6,083 branches and 29,148 ATMs. BBVA is recognized for its innovation in digital banking and sustainable finance, positioning it as a key player in the global banking sector. Its diversified geographic footprint mitigates regional risks while capitalizing on growth opportunities in emerging markets.

Investment Summary

BBVA presents a compelling investment case due to its strong international presence, particularly in high-growth markets like Mexico and South America. The bank's robust financials, including €75.6 billion in revenue and €9.7 billion in net income (FY 2024), underscore its profitability. BBVA's focus on digital transformation enhances operational efficiency and customer engagement, providing a competitive edge. However, exposure to emerging markets introduces currency and geopolitical risks. The bank's beta of 1.38 indicates higher volatility compared to the broader market. Dividend investors may find BBVA attractive with a dividend per share of €0.70, supported by solid cash reserves (€59.9 billion). Investors should weigh BBVA's growth potential against macroeconomic uncertainties in its key markets.

Competitive Analysis

BBVA competes in the global diversified banking sector with a distinct competitive advantage rooted in its digital innovation and emerging market exposure. The bank's digital banking platform is among the most advanced in Europe, reducing costs and improving customer retention. BBVA's strong foothold in Mexico (via BBVA México) provides a lucrative revenue stream, as Mexico's banking sector is less saturated than Europe's. However, BBVA faces intense competition from larger European peers like Santander and global giants such as HSBC. Its reliance on South American markets exposes it to economic instability, whereas competitors like BNP Paribas benefit from a more stable European base. BBVA's asset management division is smaller compared to specialized firms like Amundi, limiting its fee income potential. Nevertheless, BBVA's aggressive sustainability initiatives, including green financing, align with global trends and enhance its brand equity. The bank's diversified operations and technological leadership position it well for long-term growth, but execution risks in digital transformation remain a challenge.

Major Competitors

• Banco Santander, S.A. (SAN.MC): Santander is BBVA's primary Spanish rival, with a larger global footprint, particularly in Brazil and the UK. Its scale provides cost advantages, but BBVA's digital banking is more advanced. Santander's revenue diversification is stronger, but it faces higher regulatory scrutiny in Europe.
• HSBC Holdings plc (HSBA.L): HSBC dominates in Asia-Pacific, a region where BBVA has limited presence. HSBC's investment banking division outperforms BBVA's, but its recent struggles in Europe highlight BBVA's relative strength in Spain and Latin America. HSBC's capital reserves are more robust, reducing liquidity risks.
• BNP Paribas SA (BNP.PA): BNP Paribas excels in corporate banking and asset management, areas where BBVA is less dominant. BNP's European focus provides stability, but BBVA's emerging market growth potential is higher. BNP's ESG initiatives are more established, appealing to sustainability-focused investors.
• Itaú Unibanco Holding S.A. (ITUB): Itaú is BBVA's key competitor in South America, with a dominant position in Brazil. Itaú's local market expertise surpasses BBVA's, but BBVA's digital offerings are more sophisticated. Itaú's profitability is higher, but it lacks BBVA's geographic diversification.