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Banco Santander SA (SAN)
NYSE:SAN
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Banco Santander SA (SAN) AI Stock Analysis

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SAN

Banco Santander SA

(NYSE:SAN)

Rating:78Outperform
Price Target:
$10.00
â–²(17.79%Upside)
Banco Santander SA's robust earnings call highlights and strong technical indicators are the most significant factors supporting the stock score. Financial performance is solid but moderated by high leverage and cash flow issues. Valuation remains attractive, providing a balanced investment outlook.

Banco Santander SA (SAN) vs. SPDR S&P 500 ETF (SPY)

Banco Santander SA Business Overview & Revenue Model

Company DescriptionBanco Santander SA, commonly known as Santander Group, is a leading global financial institution headquartered in Madrid, Spain. It operates across various sectors, including retail banking, commercial banking, global corporate banking, and wealth management. The bank serves a diverse customer base in Europe, Latin America, North America, and Asia, offering a comprehensive range of financial products and services such as loans, credit cards, mortgages, insurance, and investment solutions.
How the Company Makes MoneyBanco Santander SA generates revenue through a variety of streams primarily centered around its banking operations. The core of its revenue model is interest income derived from its extensive portfolio of loans, which includes personal, commercial, and mortgage loans. Fee income from services such as account maintenance, transaction processing, and advisory services also contributes significantly to its earnings. Additionally, Santander benefits from its global corporate banking division, which provides specialized financial solutions to multinational corporations, including underwriting, syndication, and trading services. The bank's presence in emerging markets, especially in Latin America, is a key factor in its growth strategy, allowing it to tap into high-growth regions. Partnerships with financial technology firms also enhance its digital banking capabilities, further increasing customer engagement and revenue potential.

Banco Santander SA Earnings Call Summary

Earnings Call Date:Apr 30, 2025
(Q1-2025)
|
% Change Since: 15.98%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Positive
The earnings call presented a strong positive performance with record profits and improved capital efficiency across all segments. However, some challenges were noted in Argentina and Brazil, and there are uncertainties regarding regulatory impacts and asset sales. Overall, the positive highlights outweigh the lowlights.
Q1-2025 Updates
Positive Updates
Record Profit Achievement
Santander reported a record profit of €3.4 billion for Q1 2025, which is a 19% increase compared to Q1 2024.
Improved Capital Efficiency
Capital allocation improved profitability to 15.8% post AT1, and the CET1 ratio increased to 12.9%.
Revenue and Growth
Revenue increased by 5% supported by NII growth of 4%, excluding Argentina, and record fees with almost double-digit growth.
Operational Leverage and Efficiency Gains
Efficiency improved by 1 point, and ROTE increased by almost 2 points to 15.8%.
Strong Performance Across Segments
All business segments reported revenue and profit growth, with retail and consumer segments leading in transformation efforts.
Robust Credit Quality
Cost of risk improved to 1.14%, supported by low employment and easing monetary policies.
Shareholder Value Creation
Earnings per share rose to above €0.21, and buybacks since '21 have resulted in a 14% reduction in outstanding shares.
Negative Updates
Challenges in Argentina
Argentina caused disturbances in financial lines due to a sharp decrease in interest rates and lower hyperinflation adjustments.
Brazil Loan Loss Provisions
Loan loss provisions increased due to a weaker performance in Brazil amidst higher rates and inflation.
Potential Regulatory Changes Impact
Potential changes in regulations could affect the operations, especially in Brazil and the U.K., but specifics are still pending.
Speculation on Polish Asset Sale
Discussions on the potential sale of Santander's stake in Santander Polska with unknown outcomes.
Company Guidance
During Santander's Q1 2025 Results Call, the company provided detailed guidance on several key metrics. The bank reported a record profit of €3.4 billion, representing a 19% increase from Q1 2024, driven by growth across all business segments. The CET1 capital ratio improved to 12.9%, with a target to distribute up to €10 billion to shareholders through share buybacks in 2025/2026, subject to regulatory approvals. Santander's return on tangible equity (ROTE) increased by nearly 2 percentage points to 15.8%, supported by improved efficiency and a diversified earnings base. Revenue grew by 5%, while net interest income (NII) rose by 4%, excluding Argentina's impact. The bank's transformation efforts led to a 1-point efficiency improvement, and expenses grew below revenue and inflation. Santander aims to achieve a ROTE of around 16.5% for the full year 2025. The bank's strategy focuses on organic growth, capital productivity, and leveraging global platforms to drive profitability and shareholder value.

Banco Santander SA Financial Statement Overview

Summary
Banco Santander SA shows strong revenue growth and profitability improvements. However, high leverage and negative cash flow present significant risks. The equity ratio and ROE are strengths, but the cash flow challenges require attention.
Income Statement
79
Positive
Banco Santander SA has demonstrated strong revenue growth, with a significant increase from $44.76B in 2023 to $63.49B in 2024. The net profit margin improved from 24.73% to 19.80%, reflecting enhanced profitability. However, the absence of EBIT and EBITDA data for 2024 limits a full assessment of operating efficiency.
Balance Sheet
73
Positive
The company's debt-to-equity ratio is approximately 3.30, indicating a high level of leverage. However, the equity ratio remains stable at around 5.37%, and the ROE has increased to 12.75%, suggesting efficient use of equity capital. The high leverage poses a risk, but equity stability and return on equity are strong points.
Cash Flow
55
Neutral
Operating cash flow turned negative at -$24.16B in 2024 from $5.02B in 2023, raising concerns about cash flow generation. Free cash flow has also decreased significantly. The negative free cash flow to net income ratio suggests challenges in converting income into cash.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue50.80B44.76B54.22B48.41B46.76B
Gross Profit50.80B59.59B41.95B39.01B31.84B
EBITDA22.32B19.64B18.23B16.87B734.00M
Net Income12.57B11.08B9.61B8.12B-8.77B
Balance Sheet
Total Assets1.84T1.80T1.73T1.60T1.51T
Cash, Cash Equivalents and Short-Term Investments192.21B220.34B223.07B210.69B153.84B
Total Debt325.52B310.98B282.96B249.02B260.32B
Total Liabilities1.73T1.69T1.64T1.50T1.42T
Stockholders Equity98.60B95.42B89.10B86.93B81.48B
Cash Flow
Free Cash Flow-32.65B-8.63B16.87B45.29B57.63B
Operating Cash Flow-24.16B5.01B27.71B56.69B66.15B
Investing Cash Flow-3.71B-5.37B-3.90B-3.71B-7.22B
Financing Cash Flow-5.51B-2.06B-9.96B-1.32B-1.91B

Banco Santander SA Technical Analysis

Technical Analysis Sentiment
Positive
Last Price8.49
Price Trends
50DMA
8.14
Positive
100DMA
7.43
Positive
200DMA
6.18
Positive
Market Momentum
MACD
0.15
Positive
RSI
65.04
Neutral
STOCH
60.42
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SAN, the sentiment is Positive. The current price of 8.49 is above the 20-day moving average (MA) of 8.46, above the 50-day MA of 8.14, and above the 200-day MA of 6.18, indicating a bullish trend. The MACD of 0.15 indicates Positive momentum. The RSI at 65.04 is Neutral, neither overbought nor oversold. The STOCH value of 60.42 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SAN.

Banco Santander SA Risk Analysis

Banco Santander SA disclosed 41 risk factors in its most recent earnings report. Banco Santander SA reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Banco Santander SA Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
82
Outperform
$85.18B7.6919.22%5.08%19.48%26.26%
80
Outperform
$222.47B11.8310.83%7.41%-1.91%-6.79%
78
Outperform
$126.03B9.1413.25%0.41%0.26%19.35%
76
Outperform
$66.58B9.609.36%3.54%11.33%47.74%
75
Outperform
$68.38B10.8511.92%5.04%-0.63%-6.01%
73
Outperform
$175.57B13.906.64%2.33%0.52%89.25%
61
Neutral
C$15.14B6.6923.28%5.39%30.07%-23.38%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
SAN
Banco Santander SA
8.88
3.97
80.86%
BBVA
Banco Bilbao
15.40
5.11
49.66%
BCS
Barclays
19.46
8.10
71.30%
C
Citigroup
95.99
34.41
55.88%
HSBC
HSBC Holdings
65.13
24.82
61.57%
ING
ING Groep
23.80
6.55
37.97%
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.Date of analysis: Jul 10, 2025