Related Post
- Societe Generale will resume dividend payments as soon as the regulator opens the possibility
- France reported a new record for daily coronavirus infections with more than 16,000 cases in 24 hours
- The price of the stock is impacted by the fears of the COVID-19 environment
- Societe Generale is considering a merger of its two French retail networks
Societe Generale (OTCMKTS: SCGLF) shares have weakened from $16.6 to $12.76 in less than thirty days and the current price stands around $12.85. The price of the stock is impacted by the Covid-19 pandemic environment and the next several months will be competitive for the banking industry.
Fundamental analysis: COVID-19 infections are rising
Societe Generale is one of France’s major banks which is based on a diversified and integrated banking model. This bank was usually viewed as primarily a corporate and investment bank, but Societe Generale has important retail banking operations in Russia, North Africa and Europe.
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Last week, France reported a new record for daily coronavirus infections with more than 16,000 cases in 24 hours. Societe Generale’s shares fell through support on fears of the coronavirus Covid-19 pandemic environment but the recent sell-off created an attractive opportunity to buy this stock.
The European Central Bank urged banks to pause dividends until January 2021 and Societe Generale will not pay a dividend in 2020. The main reason for this is the Covid-19 pandemic but once the situation has stabilized, the price of this stock will be at much higher levels.
Societe Generale CEO Frederic Oudea said last week that the bank will resume dividend payments as soon as the regulator opens the possibility. According to the latest news, Societe Generale is considering a merger of its two French retail networks currently operating under different brands of Societe Generale and Credit du Nord.
The market capitalization of this stock is only $10.08B which makes Societe Generale one of the most undervalued stocks in the banking industry. Price/Book value is only 0.14 which also makes this stock very attractive for potential investors.
At the current stock price, Societe Generale could be a very good long-term investment with a generous yield and solid growth prospects.
Technical Analysis: Bulls are focused on breaking the resistance level at $15
When we take a look at the chart above ( one year period), we can see that the price of this stock has weakened from $35 to $12.6 and started to raise. On this chart, I marked current resistance and support levels.
The current supports levels are $12 and $10, $15 and $20 represent the resistance levels. If the price jumps above $15 it would be a “buy” signal and we have the open way to $18.
Rising above $20 supports the continuation of the bullish trend and the next price target could be located around $25. If the price falls even more in the upcoming period, every price in a range from $11 – $10 could be a very good opportunity to invest in Societe Generale.
Summary
Last week, France reported a new record for daily coronavirus infections and Societe Generale shares have weakened on second wave fears. Societe Generale CEO Frederic Oudea said recently that the bank will resume dividend payments as soon as the regulator opens the possibility. The majority of the metrics point to this investment being highly attractive and the recent sell-off created an attractive opportunity to invest in Societe Generale stock.
