Banco de Sabadell (SAB) AI Stock Analysis

• Market Cap: €15.35B
• Dividend Yield: 7.43%
• Average Volume (3M): 16.12M
• Price to Earnings (P/E): 10.5
• Beta (1Y): 1.27
• Revenue Growth: -6.77%
• EPS Growth: -39.63%
• Country: ES
• Employees: 18,936
• Sector: General
• Sector Strength: N/A
• Industry: Banks - Diversified
• EPS (TTM): 0.08
• Shares Outstanding: 5,023,677,700
• 10 Day Avg. Volume: 18,836,257
• 30 Day Avg. Volume: 16,119,384
• PEG Ratio: 0.00
• Price to Book (P/B): 1.33
• Price to Sales (P/S): 2.40
• P/FCF Ratio: 1.94
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €3.38
• Price Target Upside: 10.46% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 6
• EPS Forecast (FY): 0.31
• Revenue Forecast (FY): €5.36B

• Rating: 66 Neutral
• Price Target: €3.50 ▲(14.38% Upside)
• Action: Downgraded Date: 02/23/26
• Date: Action: Downgraded 02/23/26

The score is driven mainly by improving profitability and strong recent cash generation, tempered by elevated/variable leverage and a sharp 2025 revenue decline. Valuation is a clear positive (low P/E and high dividend yield), while technical signals are neutral with slightly negative MACD.

Positive Factors

Improving profitability

Net income rising to €1.77B and sustained healthy margins indicate the bank has strengthened core earning power. A larger, more resilient earnings base improves capacity to fund loan growth, retain capital, support dividends and absorb credit losses over the medium term.

Strong 2025 cash generation

Substantial operating and free cash flows in 2025 materially improve internal liquidity and funding flexibility. Durable internal cash generation reduces reliance on wholesale funding, supports organic lending and strategic investments, and provides a buffer through economic cycles.

Improved capital efficiency (ROE)

ROE moving to about 12% signals meaningful improvement in capital efficiency and management execution versus prior years. Sustained higher ROE enhances retained earnings, strengthens the capital base and supports longer-term shareholder returns without excessive external capital.

Negative Factors

Sharp revenue decline

An almost 19% revenue decline in 2025 undermines the sustainability of recent profit gains and suggests weaker core business momentum. Persistent top-line contraction would pressure margins and could force cost cuts or higher-risk activities to maintain earnings over the medium term.

Elevated, volatile leverage

High and variable leverage increases sensitivity to credit and market stress, constrains lending capacity and complicates capital planning. Material swings in leverage raise refinancing and funding risks and reduce the bank's ability to pursue growth without raising capital under adverse conditions.

Multi-year cash flow volatility

Large multi-year swings in operating and free cash flow reduce predictability of internal funding and complicate strategic planning. Continued volatility would undermine confidence in recurring cash generation and may force reliance on external funding during downturns.

Banco de Sabadell Business Overview & Revenue Model

Company Description

Banco de Sabadell, S.A. provides banking products and services to personal, business, and private customers in Spain and internationally. The company offers retail banking products, such as current and savings accounts, personal loans, cards, and mortgages. It also provides financial products and services to large and medium enterprises, SMEs, shops and self-employed workers, private individuals, and professionals; and consumer finance, asset management, and bancassurance services. In addition, the company offers corporate banking services, including financing services, transactional banking services, and other complex custom solutions in finance, treasury, and import/export, among others. Further, it provides insurance and pension products. As of December 31, 2021, the company operated 1,593 branches. Banco de Sabadell, S.A. was founded in 1881 and is based in Alicante, Spain.

How the Company Makes Money

Banco de Sabadell primarily earns revenue by operating as a deposit-taking bank and lending those funds to customers. Key revenue streams typically include: (1) Net interest income: income generated from interest on loans (e.g., mortgages, consumer credit, and business loans) and other interest-earning assets, minus interest paid on customer deposits and wholesale funding; this spread is usually the largest driver of bank earnings. (2) Fee and commission income: fees charged for services such as account maintenance, card and payments processing, cash management services for businesses, international payments, trade finance services (e.g., guarantees/letters of credit-related services), and other transaction and service-based commissions. (3) Results from financial operations and investment activities: gains or losses from trading or valuation changes in certain financial instruments, and income related to managing the bank’s securities portfolios, where applicable. (4) Other operating income: may include income from ancillary banking services and other non-interest sources; specific items vary by period and disclosure. Profitability is influenced by factors such as loan volumes and pricing, deposit and funding costs, credit quality (loan loss provisions), operating efficiency, and macroeconomic conditions (e.g., interest-rate environment and borrower performance). Specific significant partnerships or counterparties are not available in this response and are therefore null.

Banco de Sabadell Financial Statement Overview

Summary

Profitability has improved materially (net income up to €1.77B in 2025 with strong margins in 2022–2025) and recent cash generation is strong (2025 FCF ~€9.6B). Offsetting this, 2025 revenue fell sharply (-18.9% YoY), cash flows have been highly volatile across 2022–2025, and leverage remains elevated/unstable (debt-to-equity ~1.9x to ~5.4x historically, ~3.7x in 2025).

Income Statement

Profitability is solid and has improved materially versus earlier years: net income rose from €0.53B (2021) to €1.77B (2025) with healthy net profit margins in the ~20%–32% range during 2022–2025. That said, the top line is volatile—2025 revenue declined sharply (-18.9% YoY) after steady growth in 2021–2024—creating uncertainty around the sustainability of earnings. Operating profitability is also inconsistent across the period (including a loss year in 2020 and an anomalous 2023 operating margin reading), which tempers an otherwise strong profitability profile.

Balance Sheet

The balance sheet shows moderate shareholder returns with return on equity improving to ~12% in 2024–2025 from low-single-digit levels in 2020–2021. However, leverage is elevated and has moved around meaningfully, with debt-to-equity ranging from ~1.9x (2023) up to ~5.4x (2021) and back to ~3.7x (2025). Equity is broadly stable but slightly lower in 2025 versus 2024, and the higher leverage profile increases sensitivity to credit/market stress and funding conditions.

Cash Flow

Cash generation is strong in the latest periods, with operating cash flow of ~€9.9B and free cash flow of ~€9.6B in 2025, following positive cash flow in 2024. The key weakness is volatility: operating and free cash flow were deeply negative in 2022–2023, then rebounded sharply, which reduces confidence in consistency and predictability. Overall, recent cash performance is a clear positive, but the multi-year swings keep the score in the middle range.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	9.58B	7.77B	5.71B	4.99B	4.34B	4.06B
Gross Profit	6.02B	4.64B	1.41B	5.55B	4.34B	4.06B
EBITDA	2.79B	2.32B	3.01B	0.00	1.82B	678.83M
Net Income	1.72B	1.77B	1.83B	1.33B	889.39M	530.24M
Balance Sheet
Total Assets	252.37B	245.39B	239.60B	235.17B	251.38B	251.95B
Cash, Cash Equivalents and Short-Term Investments	27.20B	33.33B	31.92B	37.14B	46.12B	50.38B
Total Debt	57.49B	43.47B	45.14B	50.85B	64.40B	22.84B
Total Liabilities	237.88B	231.31B	224.57B	221.29B	238.16B	238.95B
Stockholders Equity	14.46B	14.05B	15.00B	13.84B	13.05B	12.97B
Cash Flow
Free Cash Flow	0.00	9.62B	5.82B	-11.06B	-7.06B	11.84B
Operating Cash Flow	0.00	9.92B	6.02B	-10.52B	-6.63B	12.34B
Investing Cash Flow	0.00	-8.48B	-17.33B	-163.02M	-64.80M	419.59M
Financing Cash Flow	0.00	-2.42B	-382.29M	-617.00M	-1.24B	1.10B

Banco de Sabadell Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 3.06
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ES:SAB, the sentiment is Negative. The current price of 3.06 is below the 20-day moving average (MA) of 3.21, below the 50-day MA of 3.27, and below the 200-day MA of 3.11, indicating a bearish trend. The MACD of -0.04 indicates Positive momentum. The RSI at 39.59 is Neutral, neither overbought nor oversold. The STOCH value of 18.85 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ES:SAB.

Banco de Sabadell Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SAB	66 Neutral	€15.35B	10.53	7.75%	7.43%	-6.77%	-39.63%
Sector *	55 Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%