If you have been watching Banco Bilbao Vizcaya Argentaria lately and wondering whether it is time to make your move, you are not alone. Investors everywhere are weighing their options after the stock’s impressive run. BBVA has posted a 6.0% gain over the past month, keeping pace with broader optimism in European banking. Its 12-month return stands at an eye-popping 75.2%. If you zoom out even further, the past five years have delivered an incredible 764.1% return. That is not exactly what you would call slow and steady. Clearly, the market has taken notice.

What is driving this kind of momentum? Part of the story lies in shifting perceptions about risk and global growth. As the macroeconomic environment has stabilized and interest rates have ticked higher across Europe, banks like BBVA have become increasingly attractive. Investors are also taking comfort in the company’s diversified geographic footprint and its adaptability to market changes, which helps buffer against local downturns and amplify returns when conditions are right.

Of course, with a stock rallying like this, the big question is always value. Is there still room to run, or have you missed the boat? According to a composite valuation score based on six standard checks, BBVA is undervalued in five of them. That gives it a robust value score of 5 out of 6. That is a signal worth considering, but a closer look at the numbers can reveal much more nuance.

Next, we will unpack each valuation method in detail and see how BBVA stacks up before exploring an even more insightful approach to understanding what the company is really worth.

Why Banco Bilbao Vizcaya Argentaria is lagging behind its peers

The Excess Returns model evaluates how much value a company generates above the cost of capital by measuring returns achieved on invested equity. This method is particularly useful for banks, where the ability to earn attractive returns on shareholder funds is a key indicator of financial strength and future growth.

For Banco Bilbao Vizcaya Argentaria, the model reveals several important figures. The current book value per share stands at €9.51. The stable book value, based on forward-looking estimates from eight analysts, rises to €11.60 per share. The company is projected to produce stable earnings per share of €2.05, derived from weighted future Return on Equity estimates across 14 analysts. The cost of equity is €1.11 per share, resulting in a healthy excess return of €0.93 per share. Notably, BBVA’s average return on equity is a robust 17.65%, signaling its ability to consistently outperform its equity costs and suggesting further value creation ahead.

Based on this approach, the intrinsic value of BBVA is estimated at €24.26 per share, which is 32.1% above the current market price. This points to significant undervaluation according to the excess returns methodology.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Banco Bilbao Vizcaya Argentaria.

Our Excess Returns analysis suggests Banco Bilbao Vizcaya Argentaria is undervalued by 32.1%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

The Price-to-Earnings (PE) ratio is the go-to valuation metric for profitable companies like Banco Bilbao Vizcaya Argentaria, because it directly reflects how much investors are willing to pay for each euro of earnings. It provides a simple way to compare a stock’s value with its own history, peers, and the broader industry. Typically, higher growth expectations or lower perceived risks justify a higher PE ratio. In contrast, slower growth or higher risks result in a lower one.

BBVA’s current PE ratio is 9.37x. Looking across the banking sector, its industry average PE is 10.50x and the average among peers is 10.56x. At first glance, this puts BBVA slightly below both benchmarks, suggesting its shares trade at a modest discount. However, benchmarks alone do not tell the whole story. They miss company-specific factors such as unique growth outlook, profitability, or risk profile.

This is where Simply Wall St’s “Fair Ratio” comes in. By factoring in BBVA’s earnings growth, profit margins, size, and risk alongside its industry context, the Fair Ratio gives a more tailored, up-to-date multiple. For BBVA, the Fair Ratio stands at 11.13x. Since the stock’s actual PE ratio is noticeably below this figure, it points to meaningful undervaluation. This fair value approach is more robust than peer comparisons because it adjusts for all the things that make BBVA unique. In this case, it supports the idea that the stock may offer attractive value for investors.

Result: UNDERVALUED

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. A Narrative is simply your story, the unique perspective you bring to a company, combined with your assumptions for its future revenue, earnings, and margins. Narratives bridge the gap between a company’s real-world context and a financial projection, helping turn what you believe about the business into a tangible fair value estimate.

On Simply Wall St’s Community page, investors can easily create or adopt Narratives, seeing how their views stack up against millions of others and how those stories change over time. Narratives let you instantly compare your Fair Value to the current market price, helping you make informed buy or sell decisions based on your own assumptions, not just consensus views. They are updated in real time whenever new data or news arrives, so your analysis always reflects the latest information.

For example, one investor may see BBVA’s emerging market growth and digital transformation leading to double-digit earnings growth, supporting a higher fair value. Another may be more cautious about currency risks and regulatory uncertainty, projecting a lower price. With Narratives, you can clearly see these differences and decide which best fits your outlook.

Do you think there's more to the story for Banco Bilbao Vizcaya Argentaria? 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 BBVA.MC.

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