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Banco Santander SA SAN

Morningstar Rating
€4.69 −0.07 (1.52%)
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Company Report

Santander Earnings: Solid Top-Line Results, Improved Efficiency and Operating Leverage

Narrow-moat Santander continues to benefit from the elevated rate environment, reporting a 13% increase in net interest income (excluding currency effects) in the first quarter of 2024 compared with the same quarter a year earlier. At the same time, it kept an eye on cost control, improving its efficiency ratio by 150 basis points over the last year and showing one of the lowest efficiency ratios in the industry at 42.5%. Despite being subject to a temporary Spanish government levy for interest income, Santander reported a 15% return on tangible equity for the last quarter, which differentiates it as one of the most profitable banks in our coverage. We keep our fair value estimate of EUR 5.80 per share as we believe higher-than-expected growth in the first quarter could be offset by expected rate cuts later in the year.

Price vs Fair Value

SAN is trading at a 25% premium.
Price
€4.69
Fair Value
€2.40
Uncertainty
High
1-Star Price
€6.98
5-Star Price
€6.48
Economic Moat
Vsmsf
Capital Allocation
Rgfh

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
€4.76
Day Range
€4.674.76
52-Week Range
€3.014.93
Bid/Ask
/
Market Cap
€73.00 Bil
Volume/Avg
19.4 Mil / 34.6 Mil

Key Statistics

Price/Earnings (Normalized)
6.99
Price/Sales
1.29
Dividend Yield (Trailing)
3.70%
Dividend Yield (Forward)
3.70%
Total Yield
6.78%

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
211,141

Competitors

Valuation

Metric
SAN
BBVA
HSBC
Price/Earnings (Normalized)
6.998.7911.71
Price/Book Value
0.781.090.87
Price/Sales
1.291.752.54
Price/Cash Flow
2.283.838.73
Price/Earnings
SAN
BBVA
HSBC

Financial Strength

Metric
SAN
BBVA
HSBC
Quick Ratio
Current Ratio
Interest Coverage
Quick Ratio
No chart available

Profitability

Metric
SAN
BBVA
HSBC
Return on Assets (Normalized)
0.72%1.30%0.77%
Return on Equity (Normalized)
13.89%19.92%12.89%
Return on Invested Capital (Normalized)
Return on Assets
SAN
BBVA
HSBC
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Banks - Diversified Industry Comparables

Ticker
Name
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
JPM
JPMorgan Chase & CoKjjqzwmlDkrh$568.9 Bil
BAC
Bank of America CorpQhydrbgZzf$310.5 Bil
WFC
Wells Fargo & CoDyzdttzXbvx$207.4 Bil
HSBC
HSBC Holdings PLC ADRNykbfhrCwff$164.9 Bil
RY
Royal Bank of CanadaGsgsfqjhxLlxpp$148.7 Bil
C
Citigroup IncJqzmnvtrrBsdq$119.1 Bil
MUFG
Mitsubishi UFJ Financial Group Inc ADRRgqqrkszBwdj$118.9 Bil
UBS
UBS Group AGMshdcthxrBxlpws$98.1 Bil
TD
The Toronto-Dominion BankFxgpmgwgRmvc$96.7 Bil
SAN
Banco Santander SA ADRFxbMdywqpd$79.2 Bil

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