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Banco Santander (ES:SAN)
BME:SAN
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Banco Santander
(BME:SAN)
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Rating:73Outperform
Price Target:
€11.50
▲(9.11% Upside)
Banco Santander's overall stock score reflects strong earnings performance and positive technical indicators, despite challenges with leverage and cash flow. The bank's strategic initiatives and solid capital management provide a stable outlook, though regional challenges and litigation risks require attention.
Positive Factors
High Profitability and Margins
Sustained high gross and net margins indicate Santander's ability to generate strong earnings from core banking activities. Durable margin strength supports reinvestment, dividend capacity and resilience through cycles, underpinning long-term shareholder returns.
Improving Return on Tangible Equity (RoTE)
A rising RoTE demonstrates stronger capital efficiency and successful execution of efficiency measures. At ~16.1% RoTE, management has room to allocate capital to growth, buybacks and buffers while pursuing strategic targets, supporting sustainable profitability.
Regulatory Relief Increasing Capital Efficiency
Approval to apply the Danish Compromise is a structural positive: it frees regulatory capital tied to insurance activities, enabling durable increases in lending, investment or shareholder returns and improving return-on-capital economics across European operations.
Negative Factors
High Leverage and Low Equity Ratio
Significant leverage and a low equity ratio increase sensitivity to funding stress and macro shocks. Elevated debt reliance constrains strategic flexibility, raises refinancing and regulatory risks, and may require stronger capital conservation in adverse scenarios.
Weak Cash Generation Metrics
A dramatic drop in free cash flow growth and low operating cash conversion versus reported income signal potential liquidity pressure. Persistent cash generation weakness can limit investment, capital returns and buffer capacity during downturns.
Regional Macro and Litigation Risks
Active litigation and regional economic stress (e.g., emerging market rates) create contingent liabilities and credit risks. These structural exposures can force provisions, erode margins, and distract management, weighing on long-term earnings visibility.
Banco Santander (SAN) vs. iShares MSCI Spain ETF (EWP)
Market Cap
€153.93B
Dividend Yield1.82%
Average Volume (3M)24.03M
Price to Earnings (P/E)11.6
Beta (1Y)1.61
Revenue Growth-16.49%
EPS Growth14.32%
CountryES
Employees206,736
SectorFinancial
Sector Strength70
IndustryBanks - Diversified
Share Statistics
EPS (TTM)0.22
Shares Outstanding14,689,319,000
10 Day Avg. Volume22,076,856
30 Day Avg. Volume24,027,107
Financial Highlights & Ratios
PEG Ratio0.30
Price to Book (P/B)0.70
Price to Sales (P/S)1.36
P/FCF Ratio-2.12
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
€10.22Price Target Upside-3.04% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering12
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Banco Santander Business Overview & Revenue Model
Company DescriptionBanco Santander, S.A. provides various retail and commercial banking products and services to individuals, small and medium-sized enterprises, and large companies worldwide. It offers demand and time deposits, and current and savings accounts; mortgages, consumer finance, syndicated corporate loans, structured financing, cash management, export and agency finance, trade and working capital solutions, and corporate finance; and insurance products. The company also provides cash, asset, and wealth management; and private banking services. In addition, it is involved in the corporate banking; treasury, risk hedging, foreign trade, confirming, custody, and investment banking activities. The company operates through a network of 9,879 branches. The company was formerly known as Banco Santander Central Hispano S.A. and changed its name to Banco Santander, S.A. in June 2007. Banco Santander, S.A. was founded in 1856 and is headquartered in Madrid, Spain.
How the Company Makes MoneyBanco Santander generates revenue through various key streams, primarily through net interest income, which is derived from the interest earned on loans and other financial products minus the interest paid on deposits. The bank also earns fees and commissions from a variety of services including account maintenance, transaction fees, and wealth management services. Additionally, Santander's investment banking division contributes to its revenues through advisory services, underwriting, and capital market activities. The bank has established significant partnerships and alliances with fintech companies and other financial institutions, enhancing its product offerings and expanding its customer base. Furthermore, its international presence allows Santander to diversify its income sources, making it less vulnerable to economic fluctuations in any single market.
Banco Santander Earnings Call Summary
Earnings Call Date:Oct 29, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Feb 04, 2026
Earnings Call Sentiment Positive
Santander has delivered strong results with record profits, improved RoTE, and solid capital ratios. The bank is on track to meet its strategic targets, supported by growth in key segments such as Wealth and Payments. However, challenges persist in Brazil and Argentina due to high interest rates and inflation, and ongoing litigation risks in the UK require monitoring.Q3-2025 Updates
Positive Updates
Record Quarterly Profit
Santander achieved a record quarterly profit of EUR 3.5 billion, marking the best 9-month period ever with strong revenue growth across global businesses and an increase in the customer base by 7 million year-on-year to 178 million.
Strong RoTE Improvement
The bank reported a 70 basis points increase in RoTE to 16.1%, with a target of around 16.5% for 2025, reflecting excellent progress in efficiency gains and disciplined capital allocation.
Solid Balance Sheet and Capital Ratio
Santander's balance sheet remains solid with a CET1 capital ratio at an all-time high of 13.1% and robust credit quality, indicating strong shareholder value creation with TNAV plus cash dividend per share growing 15% despite currency headwinds.
Strong Performance in Wealth and Payments
The Wealth segment reported a profit increase of 21%, while Payments saw profit growth of more than 60%, both driven by high commercial activity and strategic initiatives.
Negative Updates
Challenges in Brazil and Argentina
In Brazil, high real interest rates are creating a challenging environment for companies, particularly in agribusiness, while in Argentina, high real rates and inflation are impacting credit risk and profitability.
Litigation Risks in UK
Ongoing litigation risks related to the U.K. AXA and motor finance provisions, although not expected to be material for the group, could pose future challenges.
Company Guidance
In the third quarter of 2025, Santander reported a record quarterly profit of EUR 3.5 billion, marking the best nine-month period in its history. The bank's solid performance was driven by strong revenue growth across global businesses and a customer base increase of 7 million year-on-year, reaching 178 million. The RoTE improved by 70 basis points to 16.1%, supported by efficiency gains and a solid capital ratio of 13.1%. Despite currency headwinds, the TNAV plus cash dividend per share grew by 15%. Santander is on track to meet its strategic plan targets for 2023-2025, with a focus on disciplined capital allocation, maintaining a CET1 ratio above 13%, and executing a EUR 10 billion share buyback plan for 2025-2026. The bank's net interest income grew by 2%, while fees rose by 8%, contributing to a 4% revenue increase in constant euros. Operational efficiencies were evident, with expenses growing below revenue, resulting in solid net operating income growth. The bank anticipates sustaining its performance through strategic transformations and further leveraging its global platforms.Banco Santander Financial Statement Overview
Summary
Banco Santander demonstrates strong profitability and operational efficiency with high profit margins and return on equity. However, challenges include declining revenue growth, high leverage, and a significant drop in free cash flow growth, indicating potential liquidity issues.Income Statement
Banco Santander's income statement shows strong profitability with a high gross profit margin of 94.32% and a solid net profit margin of 25.11% for the TTM. However, revenue has slightly declined by 2.13% in the TTM, indicating potential challenges in revenue growth. The EBIT and EBITDA margins remain robust at 35.91% and 42.11%, respectively, showcasing efficient operational management.Balance Sheet
The balance sheet reflects a high debt-to-equity ratio of 3.10, which indicates significant leverage and potential risk. However, the return on equity is strong at 13.45%, suggesting effective use of equity to generate profits. The equity ratio stands at 5.54%, which is relatively low, highlighting a reliance on debt financing.Cash Flow
Cash flow analysis reveals a concerning decline in free cash flow growth by 1080.28% in the TTM, indicating potential liquidity challenges. The operating cash flow to net income ratio is low at 3.55%, suggesting limited cash generation relative to net income. However, the free cash flow to net income ratio is healthy at 81.98%, indicating efficient cash conversion from profits.| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 55.16B | 50.80B | 45.78B | 41.95B | 39.01B | 60.50B |
| Gross Profit | 49.29B | 51.20B | 46.97B | 41.95B | 39.01B | 34.39B |
| EBITDA | 22.11B | 22.22B | 19.64B | 18.23B | 16.87B | 11.18B |
| Net Income | 13.60B | 12.57B | 11.08B | 9.61B | 8.12B | -8.77B |
Balance Sheet | ||||||
| Total Assets | 1.84T | 1.84T | 1.80T | 1.73T | 1.60T | 1.51T |
| Cash, Cash Equivalents and Short-Term Investments | 343.46B | 237.41B | 406.22B | 270.77B | 264.01B | 153.84B |
| Total Debt | 316.62B | 483.38B | 310.98B | 282.96B | 249.02B | 235.27B |
| Total Liabilities | 1.73T | 1.73T | 1.69T | 1.64T | 1.50T | 1.42T |
| Stockholders Equity | 101.08B | 98.60B | 95.42B | 89.10B | 86.93B | 81.48B |
Cash Flow | ||||||
| Free Cash Flow | 20.09B | -32.65B | 66.92B | 16.87B | 45.29B | 57.63B |
| Operating Cash Flow | 25.58B | -24.16B | 80.56B | 27.71B | 56.69B | 66.15B |
| Investing Cash Flow | -969.00M | -3.71B | -80.91B | -3.90B | -3.71B | -7.22B |
| Financing Cash Flow | -11.97B | -5.51B | -2.06B | -9.96B | -1.32B | -1.91B |
Banco Santander Technical Analysis
Positive
10.54
Price Trends
9.61
Positive
9.02
Positive
7.97
Positive
Market Momentum
0.25
Negative
73.54
Negative
87.39
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ES:SAN, the sentiment is Positive. The current price of 10.54 is above the 20-day moving average (MA) of 10.15, above the 50-day MA of 9.61, and above the 200-day MA of 7.97, indicating a bullish trend. The MACD of 0.25 indicates Negative momentum. The RSI at 73.54 is Negative, neither overbought nor oversold. The STOCH value of 87.39 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ES:SAN.
Banco Santander Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | €119.64B | 11.73 | 18.66% | 3.39% | 5.66% | 8.16% | |
76 Outperform | €7.26B | 11.61 | 8.76% | 5.80% | -9.39% | 45.60% | |
76 Outperform | €75.82B | 12.92 | 15.73% | 4.05% | -7.50% | 12.76% | |
75 Outperform | €12.85B | 12.44 | 16.71% | 3.64% | -7.12% | 15.96% | |
73 Outperform | €153.93B | 11.57 | 12.91% | 1.82% | -16.49% | 14.32% | |
72 Outperform | €15.65B | 16.20 | 7.75% | 7.43% | -6.77% | -39.63% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% |
* Financial Sector Average
ES:SAN
Banco Santander
10.54
5.87
125.79%
ES:SAB
Banco de Sabadell
3.25
1.30
66.53%
ES:BKT
Bankinter
14.21
6.31
79.83%
ES:BBVA
Banco Bilbao Vizcaya Argentaria
20.91
11.05
111.98%
ES:CABK
CAIXABANK
10.61
5.35
101.67%
ES:UNI
Unicaja Banco SA
2.82
1.58
127.44%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.