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Banco Santander SA BNC

Morningstar Rating
GBX 386.00 +2.50 (0.65%)
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Company Report

Santander: Despite Exceptional Results, Future Growth Expected to Slow; Fair Value Estimate Up 7%

Narrow-moat Santander presented robust results for 2023 ahead of our forecasts. Santander's attributable profit saw a 15% increase compared with 2022, beating our forecast by 7% and contributing to an impressive 10% profit CAGR over the past decade. Despite the positive year closure, we believe future results would not be as remarkable as 2023 due to the expected decrease in interest rates. We increase our fair value estimate by 7% to EUR 5.80 per share compared with EUR 5.40 provided previously and keep a narrow moat. We believe that the shares are undervalued. Santander currently trades at 6.5 times earnings compared with 11 times the earnings average of our coverage, providing a 13% return on equity, 50% payout and stable earnings over the past decade.

Price vs Fair Value

BNC is trading at a 24% discount.
Price
GBX 375.50
Fair Value
GBX 956.00
Uncertainty
High
1-Star Price
GBX 229.35
5-Star Price
GBX 132.70
Economic Moat
Hjtxfk
Capital Allocation
Vqbn

Bulls Say, Bears Say

Bulls

Santander operates in regions with higher growth prospects and levels of profitability compared with its European peers.

Bears

With 70% of its earnings coming from outside the eurozone, Santander is highly exposed to currency risk, especially emerging-market currency risk.

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News

Trading Information

Previous Close Price
GBX 383.50
Day Range
GBX 377.36–391.00
52-Week Range
GBX 257.00–391.00
Bid/Ask
GBX 0.00 / GBX 0.00
Market Cap
GBX 6.07 Tril
Volume/Avg
9.5 Mil / 15.0 Mil

Key Statistics

Price/Earnings (Normalized)
6.75
Price/Sales
1.20
Dividend Yield (Trailing)
3.18%
Dividend Yield (Forward)
3.18%
Total Yield
6.47%

Company Profile

Santander's focus is on retail and commercial banking. Latin America is geographically the most significant operation, with Brazil making the largest contribution. Its continental European business is mainly in Spain and Portugal. Santander's UK presence is the result of its acquisition of Abbey building society. In the US, Santander operates a vehicle finance business and a regional bank focused on the Northeastern states.
Sector
Financial Services
Industry
Banks - Diversified
Stock Style Box
Large Value
Total Number of Employees
212,764

Competitors

Valuation

Metric
BNC
BBVA
HSBC
Price/Earnings (Normalized)
6.7510.5910.52
Price/Book Value
0.751.210.90
Price/Sales
1.201.952.45
Price/Cash Flow
2.124.287.84
Price/Earnings
BNC
BBVA
HSBC

Financial Strength

Metric
BNC
BBVA
HSBC
Quick Ratio
———
Current Ratio
———
Interest Coverage
———
Quick Ratio
No chart available

Profitability

Metric
BNC
BBVA
HSBC
Return on Assets (Normalized)
0.69%1.07%0.79%
Return on Equity (Normalized)
13.29%16.35%13.76%
Return on Invested Capital (Normalized)
———
Return on Assets
BNC
BBVA
HSBC
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