Banco Sabadell (BME:SAB): Assessing Valuation After Q3 2025 Guidance Reaffirmation and Analyst Downgrade

Banco de Sabadell (BME:SAB) found itself in the spotlight after its Q3 2025 earnings reaffirmed full-year guidance and medium-term targets. However, investor focus quickly shifted following a prominent analyst downgrade citing geographic risks.

See our latest analysis for Banco de Sabadell.

Despite the recent analyst downgrade, Banco de Sabadell’s share price has soared over 71% year-to-date, reinforcing the market’s recognition of its turnaround and strong execution. Its one-year total shareholder return of 82% and an extraordinary 834% over five years point to a powerful long-term momentum, even as near-term price action has cooled in recent weeks.

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With such a striking share price rally behind it, investors are now left to wonder whether Banco de Sabadell is undervalued based on its fundamentals or if the market has already priced in future growth, which may leave little room for upside.

Most Popular Narrative: 4.8% Undervalued

The most widely followed narrative now places Banco de Sabadell’s fair value at €3.34, slightly above the last close at €3.18. With this backdrop, investors are scrutinizing the underlying storyline and its financial catalysts.

Robust loan and customer fund growth, paired with successful digital transformation and cost controls, strengthen revenue streams and operational efficiency. Strategic focus on the Spanish core and improved asset quality lower risk and support increased shareholder returns and long-term earnings growth.

Read the complete narrative.

What is the secret sauce behind this valuation gap? Many are talking about transformative cost cuts, new digital business wins, and big bets on Spanish market momentum. The true driver is a set of ambitious growth, margin, and profit forecasts that could change everything. Ready to see how the numbers stack up?

Result: Fair Value of €3.34 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, key risks remain, including renewed pressure on margins and Sabadell's increased reliance on the Spanish economy. These factors could challenge bullish assumptions.

Find out about the key risks to this Banco de Sabadell narrative.

Build Your Own Banco de Sabadell Narrative

If you’re looking for a different perspective or want to dig into the figures yourself, you have the tools to shape your own story in just a few minutes. Do it your way.

A great starting point for your Banco de Sabadell research is our analysis highlighting 3 key rewards and 5 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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