BBVA Presents at Goldman Sachs, Reiterates 2025-28 Targets Amid FX and Tax Headwinds

What happened

BBVA management presented at the Goldman Sachs European Financials Conference, reaffirming its 2025-28 targets of €48 billion cumulative profit and €36 billion shareholder distributions. However, the stock's 137% rally over the past year has compressed valuation, with a P/E of ~11x and P/B ~2x, leaving limited room for further multiple expansion. Key risks we have flagged—Mexican peso depreciation, rising cost of risk above 1.5%, and Spain's extended bank tax—remain present and could pressure reported earnings. While the capital return story is compelling, execution in volatile EM markets and regulatory headwinds mean the current price already prices in a best-case scenario. We maintain our WAIT rating, favoring an attractive entry near $20 or after clear proof of delivery on 2026 profit and CET1 targets.

Implication

BBVA's conference presentation confirms its 2025-28 plan, but the stock's 11x P/E and 2x book offer limited margin of safety given Mexico FX, tax, and credit risks. We see better risk/reward near $20 or after a quarter of solid 2026 results. Hold.

Thesis delta

No material shift in thesis; management likely reaffirmed existing targets at the conference. The key delta is that the market's relief over the failed Sabadell bid may be fading, with attention returning to operational headwinds in Mexico and Spain. We see increased need for tangible proof of delivery before upgrading the rating.