European Bank Stocks Look Undervalued Despite Recession Fears

European bank stocks remain undervalued despite gains this year due to recession fears. Dividend yields are almost 8%, higher than during 2008 crisis.

Banks hold large capital buffers and profitability has improved, yet valuations remain low at 6x earnings and 0.7x book value.

Earnings growth is strong with 25% EPS gain expected this year and 6% in 2024. Banks to earn almost 40 billion euros in Q3 2022.

Dividends are back after 2020 ban. Banks driving UK dividend growth.

Market cautious on economic slowdown impact, but investors adding positions as valuations look too cheap. Knives may fall but large banks still attractive.