Unicredit share price has been a shining star in the banking sector in the past few years. UCH gas surged by over 560% in the last five years, beating the S&P Bank ETF (KBW), which has jumped by 80% in this period. This growth has transitioned Unicredit into a €80 billion juggernaut in the banking sector.
Recently, however, a new star in the European banking industry: Societe Generale, the third-biggest bank in France after BNP Paribas and Credit Agricole.
Societe Generale stock price has surged by 50% this year, beating most banks globally, including popular names like Goldman Sachs, Morgan Stanley, and Bank of America. It has soared by 83.58% in the last 12 months, and has just crossed Unicredit’s performance, which is up by 83.3%.
Read more: How Unicredit share price outperformed European banks
Why Societe Generale stock is surging
Societe Generale is one of the biggest banking groups in Europe. Established 160 years ago, the company now serves over 25 million customers across the retail and corporate sectors.
The company offers its solutions across three divisions: French retail, private banking, and insurance, global banking, and international retail.
Societe Generale share price has surged after it published its financial results in February. Its revenue soared by 6.7% in the fourth quarter to €26.7 billion. This revenue figure was about 5% higher than its previous guidance.
The company attributed this performance to its robust growth in France, its core market, where the net interest income jumped. The NII figure rose even as the European Central Bank (ECB) slashed interest rates.
Further, Societe Generale’s business thrived because of its Global Banking and Investor Solutions business whose revenues jumped above the €10 billion mark.
The company has also become highly profitable, helped by its cost reduction policies. Its cost-to-income ratio dropped to 69%, lower than the target of 71%.
This growth has helped the company reward its shareholders through dividends and buybacks. It has increased its distributions by over 75% since 2023 as it returned most of the excess profits to its shareholders.
Societe Generale committed to return €1.74 billion to shareholders in February through dividends and share repurchase. It also received the ECB approval to boost its payout ratio to 50% of the net income.
Most importantly, Societe Generale boosted its 2025 outlook. It now expects that its revenue will grow by 3%, a good number considering that the ECB rate cuts will affect its net income margin.
Read more: Why is Societe Generale making a comeback to gold trading?
Societe Generale share price analysis
Societe Generale stock chart by TradingView
The weekly chart shows that the Societe Generale stock price has been in a strong surge in the past few months. It has soared in the last nine consecutive weeks, the longest winning streak in years.
This surge happened after the stock formed a giant megaphone pattern between February 2022 and last year. This pattern is made up of two ascending and diverging trendlines and often leads to more gains over time.
The Societe Generale share price has jumped above the crucial resistance level at €31.65, the highest swing in 2021. It also remains significantly higher than the 100-week and 50-week moving averages.
Further, the MACD and the Relative Strength Index (RSI) have continued rising and remain above the overbought level.
Therefore, the outlook for the Societe Generale stock is bullish, with the next target being at €50. However, there is a likelihood that it will drop and retest the support at €31.65 and then resume the uptrend. This price action is known as a break and retest and is one of the most bullish signs in the market.
The post Move on Unicredit: Societe Generale stock is firing on all cylinders appeared first on Invezz
