Greece's Credit Upgrade and Its Implications for Greek Equities in 2026

The recent upgrade of Greece's sovereign credit rating to "BBB" by Fitch Ratings in November 2025 marks a pivotal moment in the country's economic trajectory. This investment-grade status, achieved after years of fiscal discipline and structural reforms, has significant implications for Greek equities. As borrowing costs decline and investor sentiment improves, sectors such as banking, infrastructure, and utilities are poised to benefit. However, identifying undervalued stocks within these sectors requires a nuanced understanding of both macroeconomic tailwinds and microeconomic fundamentals.

A Credit Upgrade as a Catalyst for Structural Change

Greece's journey to BBB status reflects a combination of sustained budget surpluses, a declining public debt-to-GDP ratio (projected to fall from 145% in 2025 to 122% by 2030), and improved tax collection. Fitch's upgrade underscores the country's ability to manage fiscal risks while maintaining growth, with Scope Ratings and S&P Global also affirming or revising their outlooks to positive. This shift has reduced the risk premium on Greek debt, lowering borrowing costs for both the government and corporates. For equity investors, the improved credit profile signals a more stable operating environment, particularly for sectors tied to public investment and infrastructure development.

Banking Sector: A Cornerstone of Recovery

The banking sector stands to gain the most from Greece's credit upgrade. Fitch explicitly noted that systemic banks are now rated investment grade, with the National Bank of Greece (NBG) receiving a positive outlook revision. Piraeus Financial Holdings, another major player, has demonstrated robust performance, including a 13.8% return on tangible book value in 2025 and upgraded guidance for loan growth. While specific P/E and P/B ratios for Greek banks remain limited in the provided data, industry-wide metrics suggest undervaluation. For instance, the Greek banking sector's P/E ratio in Q3 2025 was 10.5x, significantly above its 3-year average of 6.3x. Piraeus Bank's P/E of 8.85 and P/B of 1x further highlight its potential for capital appreciation according to Yahoo Finance.

Infrastructure and Utilities: Undervalued Growth Opportunities

Infrastructure and utilities are another key area of opportunity. The Greece Stock Market's overall P/E ratio of 10.58 as of September 2025 suggests a broadly undervalued market. Intralot, a global leader in lottery and gaming solutions, exemplifies this trend. With a nine-month adjusted EBITDA of €90.1 million and a 37.2% margin, the company's fundamentals outperform its valuation metrics according to TradingView. Similarly, A.K. Tor (AKTOR Group) is leveraging its expertise in construction, energy, and real estate to expand into public-private partnerships (PPPs) and renewable energy projects, funded by a recent €140 million bond issuance. These companies, while not explicitly tied to the credit upgrade, benefit from the broader economic stability it engenders.

Strategic Entry Points and Risks to Consider

While the credit upgrade creates a favorable backdrop, investors must remain cautious. Lingering challenges include global policy uncertainty and the need for continued fiscal discipline. For example, NBG's price target was raised to €13.93 by analysts, reflecting optimism but also highlighting valuation concerns. Similarly, European utilities, though undervalued relative to U.S. counterparts, face sector-specific risks such as regulatory shifts and energy transition costs. A disciplined approach-focusing on companies with strong balance sheets, clear growth trajectories, and alignment with Greece's NGEU-driven infrastructure plans-will be critical.

Conclusion: A Window of Opportunity

Greece's BBB rating is more than a symbolic achievement; it is a catalyst for long-term capital flows into equities. The banking sector's improved creditworthiness, coupled with undervalued infrastructure and utilities stocks, presents a compelling case for strategic entry. However, success hinges on rigorous due diligence and a focus on companies that can capitalize on the country's renewed economic momentum. As Fitch and Scope have affirmed, Greece's fiscal and economic resilience is no longer in question. The next step is to identify the stocks that will lead the way in this new era.