Thinking about what to do with ING Groep stock right now? You are not alone. After all, it is hard to ignore a bank that has delivered a 41.3% return year-to-date and a massive 420.0% climb over five years. Clearly, ING is not just along for the ride in Europe’s banking scene; it is shaping the journey, and the stock price reflects that. Over the past week and month, shares have added 1.3%, echoing broader optimism in the European financial sector as investors reassess risk and growth potential. The steady gains hint at changing market sentiment, possibly influenced by shifts in confidence around European interest rates and global economic stability.

Yet, before you jump in or cash out, there is a big question to consider: is ING Groep still undervalued after such a run? Using six key valuation checks, ING passes two, giving it a value score of 2 out of 6. That is not exactly a screaming bargain, but it is also not an automatic red flag, either. In the next section, we will dig into each valuation method used to analyze ING’s share price, exploring how they stack up in today’s market. And stick around, because we will wrap up with a smarter perspective on what truly matters when approaching undervalued stocks like ING Groep.

ING Groep scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

The Excess Returns valuation method is designed to measure how much value a company creates above its cost of equity. This approach examines whether the return on capital invested by shareholders exceeds what investors would expect from a similar-risk alternative. For ING Groep, this method evaluates actual and projected returns to determine whether shareholder value is accumulating over time.

According to forecasted data, ING has an average Return on Equity of 13.07%. With a cost of equity at €1.12 per share, the bank generates an excess return of €1.18 per share. The company’s current book value per share stands at €17.36, while stable EPS projections average €2.30 per share based on weighted estimates from 14 analysts. Looking further ahead, the stable book value is estimated at €17.61, with figures derived from nine analyst forecasts.

Based on the Excess Returns model, the intrinsic value of ING Groep is calculated to be €42.68 per share. This indicates the stock is currently trading 49.7% below its estimated fair value, highlighting it as notably undervalued compared to the current market price.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for ING Groep.

Our Excess Returns analysis suggests ING Groep is undervalued by 49.7%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

The Price-to-Earnings (PE) ratio is a widely used valuation tool for profitable companies like ING Groep. It compares the company’s current share price to its earnings per share, providing a simple snapshot of what investors are willing to pay for each euro of earnings. For banks and other established financial institutions, the PE ratio is especially relevant because stable and predictable profits allow for more meaningful comparisons.

What counts as a "fair" PE ratio is often shaped by factors such as growth expectations and perceived risk. Faster-growing or lower-risk companies typically command higher PE ratios, while slow-growth or riskier stocks trade at lower multiples.

ING Groep currently trades at a PE ratio of 12.6x. Looking at benchmarks, the average for close peers sits at 9.6x and the banking industry average is 10.4x. On the surface, ING appears to trade at a premium. However, the Simply Wall St Fair Ratio for ING is 12.1x, which factors in the company’s specific growth prospects, profitability, market capitalization, and risk profile. This tailored benchmark offers a more accurate sense of value than a simple comparison to peers or the wider industry as it directly reflects ING’s unique position and outlook.

With ING’s actual PE ratio sitting less than 0.1x above its Fair Ratio, the stock is currently valued about right in the market’s eyes.

Result: ABOUT RIGHT

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives. In simple terms, a Narrative is your own story and perspective about ING Groep, the beliefs you have about future revenue, margins, and what constitutes fair value, all woven into a single framework. Narratives make investing feel less abstract because you are tying ING’s business journey and competitive edge to a concrete financial forecast, and then seeing what that means for fair value.

On Simply Wall St’s Community page, Narratives are an intuitive and powerful tool used by millions of investors, making it easy for you to articulate your insights and compare your assumptions to those of others. With Narratives, you regularly compare what you think ING Groep is worth to the current share price, helping you decide when it might be smart to buy, hold, or sell. The best part is that Narratives are automatically updated as key developments, from new earnings releases to breaking news, are posted, so your convictions and calculations always stay relevant.

For example, some investors believe ING Groep is worth as much as €27.92 per share while others see a fair value as low as €17.50, showing how Narratives allow every investor’s outlook to be visible, comparable, and dynamic.

Do you think there's more to the story for ING Groep? Create your own Narrative to let the Community know!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include INGA.enxtam.

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