BBVA

We rate BANCO BILBAO VIZCAYA ARGENTARIA, S.A. (BBVA) as a Hold with a composite score of 58.7/100 at a current price of $23.52. The stock presents a mixed quantitative picture — neither compelling enough to warrant new accumulation nor weak enough to justify selling for existing holders. Our factors are split, and the overall profile suggests patience is warranted.

The rating is primarily driven by strength in momentum (84th percentile) and value (73th percentile), which together account for the majority of the composite score. Offsetting weakness in quality (35th percentile) and stability (44th percentile) tempers our overall conviction. We assign a No Moat rating (37/100), Medium uncertainty, and Poor capital allocation.

Key items to watch: quarterly earnings execution and sector-level competitive dynamics. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

BANCO BILBAO VIZCAYA ARGENTARIA, S.A. holds a top-quartile position (#0 of 50) within the Finance, Insurance, And Real Estate sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 58.7/100 places it at rank #814 in our full 7,333-stock universe. With a $53.6B market capitalization, BANCO BILBAO VIZCAYA ARGENTARIA, S.A. operates at meaningful scale within the Finance, Insurance, And Real Estate sector, providing competitive advantages in distribution, procurement, and customer reach.

The outlook is moderately positive, with revenue expanding at 11% and favorable momentum (84th percentile) reflecting constructive market sentiment. The business shows steady execution, though the growth rate is below the levels typically associated with high-conviction growth stories. Momentum confirmation provides support for the current price level.

The margin cascade tells an important story: gross margins of 87% (+10.1pp vs sector) narrow to operating margins of 13% (-3.6pp vs sector) and net margins of 27.8%, yielding a gross-to-net conversion rate of 32%. This efficient conversion suggests well-controlled operating costs and limited margin leakage between the gross and net levels.

At a current price of $23.52, BANCO BILBAO VIZCAYA ARGENTARIA, S.A. appears undervalued relative to its fundamentals. Our value factor score of 73/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. The stock screens as attractively priced on a majority of these measures, suggesting the market may be underappreciating the underlying fundamentals.

The stock currently trades at EV/EBITDA of 1.1x (discounted to peers), P/S of 0.7x. We evaluate these multiples in the context of both absolute levels and sector-relative positioning to form our valuation view.

We assign a Medium uncertainty rating to BANCO BILBAO VIZCAYA ARGENTARIA, S.A.. The stock presents a balanced risk profile: weak quality scores (35th percentile). While not risk-free, the core business fundamentals are adequate to withstand moderate economic stress, and the range of potential outcomes around our fair value estimate is manageable.

Specific risk factors that inform our assessment include: weak quality scores (35th percentile). Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 44th percentile and quality factor at the 35th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: healthy gross margins of 87% provide a buffer against cost pressures; large-cap scale ($53.6B) provides resilience; a 8.00% dividend yield anchors total return. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.

We rate BANCO BILBAO VIZCAYA ARGENTARIA, S.A.'s capital allocation as Poor. Key concerns include low returns on equity (-34.7%). Exemplary capital allocators generate ROE above 20% and maintain conservative leverage — BANCO BILBAO VIZCAYA ARGENTARIA, S.A. significantly underperforms these benchmarks, raising questions about management's ability to create shareholder value.

Investors should scrutinize management's reinvestment decisions and balance sheet trajectory before committing capital. Poor capital allocation often compounds over time: overlevered balance sheets limit strategic flexibility, while low returns on capital destroy shareholder value. We would need to see sustained improvement in profitability metrics and balance sheet discipline before considering an upgrade.

In summary, BANCO BILBAO VIZCAYA ARGENTARIA, S.A. receives a Hold rating with a composite score of 58.7/100 (rank #814 of 7,333). Our quantitative framework assigns a No Moat (37/100, trend: stable), Medium uncertainty, and Poor capital allocation. The average factor score across quality, value, momentum, stability, and investment is 59/100.

Our analysis supports a neutral stance on BANCO BILBAO VIZCAYA ARGENTARIA, S.A.. While the quantitative profile is not weak enough to warrant selling, it lacks the multi-factor strength required for a buy recommendation. Existing holders should maintain positions and monitor for catalysts — either fundamental improvement or valuation compression — that would shift the risk-reward balance.