Our latest research article

Banco Santander S.A still has some upside?

The most appealing trait of Santander is its apparent undervaluation with respect to its peers. The value approach, where the intrinsic value of the company is lower than that reflected by the market, together with an apparent bright future in terms of growth, makes the ‘value-trap’ scenario highly unlikely. Overall, the close to 80% upside is plausible, however, contingent to the expected success in the expansion plain to the US market, while maintaining its position in the current regions. The P/B ratio of 1.41, that results in an implied share price of $10.65 causes Santander at the top of our Spanish watchlist in 2025.

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Our Company Overview section clearly reflects Santander’s intention to expand its operations to the most important capital markets region of the world. It is no secret that the US is the most prestigious and profitable region for the banking industry. The low regulation environment and higher historical average ROE in the industry in comparison to Europe are key drivers of the strategic decision. These are complemented by the opportunity that presented itself after the acquisition of Credit Suisse, a gap in the market that Santander intends to fill. Although it is recognized by executives that becoming a major player is not the target, the extra growth and expansionist sentiment is certainly appealing for investors. The competitive environment in the region is not to be taken lightly, Santander will need to thrive where other large European banks have failed (Deutsche Bank) to consolidate its position.