Analysts have slightly raised their fair value estimate for Banco de Sabadell from €3.33 to €3.34. This change reflects modest updates to profitability projections and consideration of revised price targets in recent research reports.

Analyst Commentary

Recent street research on Banco de Sabadell reveals a mix of optimism and caution from analysts as they evaluate the bank's valuation, dividend prospects, and strategic decisions. The following are the key bullish and bearish takeaways identified from the latest commentary:

Bullish Takeaways

• Some bullish analysts highlight the bank’s attractive dividend yield, projecting payouts as high as 22% over the next six months. This could serve as a significant support for the share price.
• Forecasted stability in Sabadell’s core business and improved profitability has contributed to maintaining or resuming coverage with neutral or equal weight ratings.
• There is recognition of management’s steady execution, with aligned expectations for achievable near-term targets despite market uncertainties.
• The current share valuation is viewed by some as reasonable. Analysts are factoring in revised price targets that reflect solid fundamentals and expected capital returns.

Bearish Takeaways

• Bearish analysts have revised their price targets downward, reflecting concerns about Sabadell’s future earnings growth and the sustainability of recent profitability trends.
• There are ongoing uncertainties related to the potential takeover price for BBVA. Some see the current terms as inadequate for a successful deal.
• Questions remain regarding the bank’s capacity to drive further value creation amid competitive pressures and a shifting macroeconomic environment.
• Some analysts maintain a cautious stance, holding neutral or hold ratings as they await clearer signs of execution on strategic initiatives.

What's in the News

• BBVA’s acquisition offer for Banco de Sabadell has been rejected multiple times. The Board of Sabadell unanimously recommended shareholders reject it on September 12, 2025. The offer was officially voided on October 16, 2025, after only 25.5% of voting rights supported it, which fell short of the minimum acceptance condition (Key Developments).
• After several revisions, including enhanced cash and share components, the final offer was 1 newly issued BBVA share and €0.29 in cash for every 5.0196 Banco Sabadell shares. Despite regulatory approvals from the European Central Bank and the European Commission, Sabadell’s board determined the enhanced offer undervalued the bank (Key Developments).
• Banco de Sabadell completed a significant share buyback program, repurchasing 264,551,530 shares, or 4.94% of its capital, for €714.62 million between May 9 and August 1, 2025 (Key Developments).
• The BBVA takeover bid required approval from multiple regulators, including the Spanish Market and Competition Authority, the UK’s Prudential Regulation Authority, and antitrust authorities in Spain. The process involved numerous legal and financial advisors for both parties (Key Developments).

Valuation Changes

• The Fair Value Estimate has risen slightly, from €3.33 to €3.34.
• The Discount Rate is up marginally, increasing from 9.53% to 9.54%.
• The Revenue Growth estimate has improved modestly, with the projected decline narrowing from -3.60% to -3.54%.
• The Net Profit Margin is down slightly, decreasing from 29.80% to 29.68%.
• The Future P/E Ratio has edged higher, moving from 13.81x to 13.91x.