Goldman Sachs downgraded Societe Generale to neutral from buy on Monday, citing higher investment spending in the French lender’s Global Markets division as a key headwind to near-term profitability.
The bank reduced its price target to €80.50 from €90.75, implying a 9.8% upside based on Societe Generale’s closing price of €73.29 on Sept. 1. Goldman also lowered its valuation multiple to 8.0 times from 9.0 times previously, reflecting concerns over operating leverage and a more challenging macro backdrop.
Analysts project Societe Generale’s cost-income ratio to reach 56% by 2029, exceeding consensus estimates of 54% and marking a 200-basis-point gap. Net income for 2029 is forecast at €7.3 billion, roughly 5% below the €7.6 billion consensus. Return on tangible equity is expected to settle at 13.6%, while total annual capital distributions from 2027 to 2029 are modeled between €5.7 billion and €5.9 billion.
Societe Generale’s CET1 capital ratio is managed above a 13% target, with ordinary distributions set at about 50% of earnings, supplemented by additional buybacks. The bank is scheduled to host a Capital Markets Day on Sept. 21 to outline its strategy on risk-weighted asset growth, cost control, returns, and excess capital distribution.
Over the two years prior to the downgrade, Societe Generale delivered a total share return of approximately 250%. Since being added to Goldman’s Buy List on Dec. 4, 2025, the stock has risen 16%, outperforming the FTSE World Europe index’s 13% gain over the same period.
