Goldman Sachs analyst Chris Hallam maintained a Buy rating on Banco Santander on July 1 and set a price target of €7.60.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Chris Hallam has given his Buy rating due to a combination of factors surrounding Banco Santander’s strategic acquisition of TSB. The acquisition is expected to significantly enhance Santander’s market position in the UK, making it the third-largest bank in terms of personal current accounts. This move is projected to deliver a return on invested capital exceeding 20%, which would boost Santander UK’s return on tangible equity from 11% in 2024 to 16% by 2028.
Additionally, the acquisition is anticipated to generate substantial cost synergies, estimated at £400 million, which represents 13% of the combined business’s cost base. These synergies are expected to contribute to earnings per share growth from the first year, with a projected 4% increase by 2028. Despite the initial capital impact, the transaction is not expected to affect Santander’s distribution policy or its 2025 targets, maintaining a strong capital position with a CET1 ratio of approximately 13% by the end of 2025.
In another report released on July 2, Citi also assigned a Buy rating to the stock with a €7.20 price target.
Based on the recent corporate insider activity of 43 insiders, corporate insider sentiment is neutral on the stock.