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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:
€9.50
▲(11.37% Upside)
Banco Santander's overall score reflects strong technical indicators and reasonable valuation. However, financial performance is hindered by high leverage and liquidity concerns, which need to be addressed for long-term stability.
Positive Factors
Negative Factors
Banco Santander (SAN) vs. iShares MSCI Spain ETF (EWP)
Market Cap
£124.66B
Dividend Yield1.99%
Average Volume (3M)19.95M
Price to Earnings (P/E)9.5
Beta (1Y)1.52
Revenue Growth-14.67%
EPS Growth16.25%
CountryES
Employees206,736
SectorFinancial
Sector Strength70
IndustryBanks - Diversified
Share Statistics
EPS (TTM)0.22
Shares Outstanding14,885,325,000
10 Day Avg. Volume20,996,786
30 Day Avg. Volume19,948,386
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
£8.27Price Target Upside-3.09% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering12
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 primarily through interest income from loans and advances to customers, which constitutes a significant portion of its earnings. Additionally, the bank earns fees and commissions from various services such as account maintenance, transaction processing, and wealth management. The investment banking division contributes to revenue through advisory services, underwriting, and market-making activities. Key partnerships with technology firms enhance its digital banking capabilities, attracting a younger customer base and increasing transaction volumes. Furthermore, Santander's presence in multiple countries allows it to diversify its revenue streams and mitigate risks associated with economic fluctuations in specific regions.
Banco Santander Earnings Call Summary
Earnings Call Date:Jul 30, 2025
(Q1-2025)
| % Change Since: |
Next Earnings Date:Oct 29, 2025
Earnings Call Sentiment Positive
The earnings call highlighted significant profit growth, strong capital metrics, and operational efficiencies, with successful global business performance. However, challenges in Argentina, Brazil, and Germany's regulatory environment were noted. The overall sentiment reflects a strong positive outlook with some regional challenges.Q1-2025 Updates
Positive Updates
Record Profit in Q1 2025
Santander achieved a record profit of €3.4 billion in Q1 2025, which is 19% higher than Q1 2024. All business segments contributed to this growth.
Strong Capital and Profitability Metrics
The CET1 ratio improved to 12.9% and return on tangible equity (RoTE) increased to 15.8%, demonstrating strong capital allocation and profitability.
Global Business Growth
Retail, Wealth, and CIB segments all showed strong revenue and profit growth, with retail revenue up 8% and CIB revenue in the U.S. up 23% year-on-year.
Operational Efficiency Improvements
The efficiency ratio improved by around 1 point, and cost to serve dropped by 5%. Digital sales increased by 23% year-on-year.
Successful Share Buybacks
Santander plans to distribute up to €10 billion to shareholders through share buybacks in 2025/2026, reflecting confidence in profitability and value creation.
Negative Updates
Challenges in Argentina
The business faced disturbances in Argentina, with a sharp decrease in interest rates affecting net interest income by around €600 million year-on-year.
Brazil’s Credit Quality Pressure
Some credit quality deterioration was noted in Brazil due to higher rates and inflation, impacting the cost of risk.
Regulatory Impact on Consumer Business
The consumer segment in Germany was impacted by new insurance regulations, affecting fee income.
Company Guidance
During the Santander Q1 2025 Results Call, the company reported a record profit of €3.4 billion, a 19% increase from Q1 2024, signaling strong performance across all business units. Key financial metrics highlighted include a CET1 ratio of 12.9% and a ROTE of 15.8%, marking nearly a 2-point increase. The bank's diversified earnings stream and capital allocation strategy supported a €10 billion distribution target for 2025/2026, contingent on regulatory approvals. Revenue growth was up by 5%, with net interest income increasing by 4%, excluding Argentina, and efficiency gains contributing to an improvement in the cost-to-revenue ratio by around 1 point. The cost of risk improved consistently, with a stable credit quality trend reflected in a cost of risk of 1.14%. Santander's strategic focus on transformation and digital integration, including the successful launch of Openbank in Mexico and ongoing global platform rollouts, is driving operational efficiencies and customer growth. The bank reiterated its guidance for 2025, emphasizing continued profitable growth and value creation despite macroeconomic uncertainties.Banco Santander Financial Statement Overview
Summary
Banco Santander shows strong profitability 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.75
Positive
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.65
Positive
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.60
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 53.16B | 50.80B | 45.78B | 41.95B | 39.01B | 60.50B |
| Gross Profit | 50.14B | 51.20B | 46.97B | 41.95B | 39.01B | 34.39B |
| EBITDA | 22.39B | 22.22B | 19.64B | 18.23B | 16.87B | 734.00M |
| Net Income | 13.35B | 12.57B | 11.08B | 9.61B | 8.12B | -8.77B |
Balance Sheet | ||||||
| Total Assets | 1.82T | 1.84T | 1.80T | 1.73T | 1.60T | 1.51T |
| Cash, Cash Equivalents and Short-Term Investments | 351.61B | 237.41B | 406.22B | 270.77B | 264.01B | 153.84B |
| Total Debt | 311.96B | 483.38B | 310.98B | 282.96B | 249.02B | 235.27B |
| Total Liabilities | 1.71T | 1.73T | 1.69T | 1.64T | 1.50T | 1.42T |
| Stockholders Equity | 100.50B | 98.60B | 95.42B | 89.10B | 86.93B | 81.48B |
Cash Flow | ||||||
| Free Cash Flow | 31.66B | -32.65B | 66.92B | 16.87B | 45.29B | 57.63B |
| Operating Cash Flow | 38.62B | -24.16B | 80.56B | 27.71B | 56.69B | 66.15B |
| Investing Cash Flow | -1.97B | -3.71B | -80.91B | -3.90B | -3.71B | -7.22B |
| Financing Cash Flow | -9.39B | -5.51B | -2.06B | -9.96B | -1.32B | -1.91B |
Banco Santander Technical Analysis
Positive
8.53
Price Trends
7.91
Positive
7.43
Positive
6.42
Positive
Market Momentum
0.16
Positive
62.01
Neutral
67.24
Neutral
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 8.53 is above the 20-day moving average (MA) of 8.29, above the 50-day MA of 7.91, and above the 200-day MA of 6.42, indicating a bullish trend. The MACD of 0.16 indicates Positive momentum. The RSI at 62.01 is Neutral, neither overbought nor oversold. The STOCH value of 67.24 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ES:SAN.
Banco Santander Peers Comparison
Overall Rating
UnderperformOutperform
Sector (68)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | 92.30B | 8.88 | 18.49% | 4.32% | 7.39% | 16.20% | |
73 Outperform | £124.66B | 9.49 | 13.10% | 1.99% | -14.67% | 16.25% | |
72 Outperform | 60.86B | 10.13 | 0.00% | 5.04% | -3.16% | 16.68% | |
71 Outperform | 5.99B | 9.61 | 0.00% | 6.50% | -5.30% | 55.66% | |
71 Outperform | 11.64B | 11.40 | 0.00% | 4.32% | -1.36% | 13.42% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% |
* Financial Sector Average
Performance Comparison
ES:SAN
Banco Santander
8.53
4.12
93.23%
GB:0H00
Banco de Sabadell
3.20
1.41
78.77%
GB:0H7O
Bankinter
13.14
5.58
73.81%
GB:BVA
Banco Bilbao Vizcaya Argentaria
16.20
6.75
71.43%
GB:0ILK
CAIXABANK
8.68
3.49
67.24%
UNJCF
Unicaja Banco SA
2.74
1.52
124.59%
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.