Banco Santander (BME:SAN) - Share price, News & Analysis

Q: What is the Fair Price of SAN when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

SAN (€2.78) is trading below our estimate of [[fair value]] (€4.39)

SAN fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	2/6
Past Performance	2/6
Financial Health	4/6
Dividends	3/6

SAN Stock Overview

Banco Santander, S.A. provides various retail and commercial banking products and services to individuals, small and medium-sized enterprises, and large companies worldwide.

Rewards

Trading at 36.7% below our estimate of its fair value

Earnings are forecast to grow 4.33% per year

Became profitable this year

Risk Analysis

Unstable dividend track record

Banco Santander Competitors

Banco Bilbao Vizcaya Argentaria

BME:BBVA

€27.6b

CaixaBank

BME:CABK

€27.8b

Bankinter

BME:BKT

€5.3b

Banco de Sabadell

BME:SAB

€4.4b

Price History & Performance

Summary of all time highs, changes and price drops for Banco Santander
Historical stock prices
Current Share Price	€2.78
52 Week High	€3.48
52 Week Low	€2.49
Beta	1.68
1 Month Change	-8.64%
3 Month Change	-11.62%
1 Year Change	-15.17%
3 Year Change	-29.45%
5 Year Change	-51.33%
Change since IPO	-16.50%

Shareholder Returns

	SAN	ES Banks	ES Market
7D	-0.7%	-1.2%	-0.5%
1Y	-15.2%	-3.6%	-8.5%

Return vs Industry: SAN underperformed the Spanish Banks industry which returned -3.6% over the past year.

Return vs Market: SAN underperformed the Spanish Market which returned -8.5% over the past year.

Price Volatility

Is SAN's price volatile compared to industry and market?
SAN volatility
SAN Average Weekly Movement	5.2%
Banks Industry Average Movement	5.8%
Market Average Movement	3.8%
10% most volatile stocks in ES Market	6.9%
10% least volatile stocks in ES Market	1.4%

Stable Share Price: SAN is not significantly more volatile than the rest of Spanish stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: SAN's weekly volatility (5%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1856	198,204	Jose Antonio Alvarez Alvarez	https://www.santander.com

Banco 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.

Banco Santander Fundamentals Summary

How do Banco Santander's earnings and revenue compare to its market cap?
SAN fundamental statistics
Market Cap	€46.61b
Earnings (TTM)	€8.49b
Revenue (TTM)	€39.89b

5.5x

P/E Ratio

0.5x

P/B Ratio

Is SAN overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
SAN income statement (TTM)
Revenue	€39.89b
Cost of Revenue	€0
Gross Profit	€39.89b
Other Expenses	€31.39b
Earnings	€8.49b

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

Jul 28, 2022

Earnings per share (EPS)	0.51
Gross Margin	100.00%
Net Profit Margin	21.29%
Debt/Equity Ratio	313.7%

How did SAN perform over the long term?

See historical performance and comparison

Dividends

3.6%

Current Dividend Yield

20%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is SAN undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for SAN?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for SAN. This is calculated by dividing SAN's market cap by their current preferred multiple.
What is SAN's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	€46.61b

SAN key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	n/a
Enterprise Value/EBITDA	n/a
PEG Ratio	1.3x

Price to Earnings Ratio vs Peers

How does SAN's PE Ratio compare to its peers?

SAN PE Ratio vs Peers

The above table shows the PE ratio for SAN vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	14.2x
BBVA Banco Bilbao Vizcaya Argentaria	5.9x	3.8%	€27.6b
CABK CaixaBank	30.8x	21.6%	€27.8b
BKT Bankinter	12.2x	12.9%	€5.3b
SAB Banco de Sabadell	7.9x	17.0%	€4.4b
SAN Banco Santander	5.5x	4.3%	€46.6b

Forward PE

Price-To-Earnings vs Peers: SAN is good value based on its Price-To-Earnings Ratio (5.5x) compared to the peer average (14.2x).

Price to Earnings Ratio vs Industry

How does SAN's PE Ratio compare vs other companies in the European Banks Industry?

Price-To-Earnings vs Industry: SAN is good value based on its Price-To-Earnings Ratio (5.5x) compared to the Spanish Banks industry average (6.9x)

Price to Earnings Ratio vs Fair Ratio

What is SAN's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

SAN PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	5.5x
Fair PE Ratio	8.8x

Price-To-Earnings vs Fair Ratio: SAN is good value based on its Price-To-Earnings Ratio (5.5x) compared to the estimated Fair Price-To-Earnings Ratio (8.8x).

Share Price vs Fair Value

What is the Fair Price of SAN when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: SAN (€2.78) is trading below our estimate of fair value (€4.39)

Significantly Below Fair Value: SAN is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: SAN is poor value based on its PEG Ratio (1.3x)

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Future Growth

How is Banco Santander forecast to perform in the next 1 to 3 years based on estimates from 18 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

4.3%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: SAN's forecast earnings growth (4.3% per year) is above the savings rate (0.9%).

Earnings vs Market: SAN's earnings (4.3% per year) are forecast to grow slower than the Spanish market (12.6% per year).

High Growth Earnings: SAN's earnings are forecast to grow, but not significantly.

Revenue vs Market: SAN's revenue (5.2% per year) is forecast to grow faster than the Spanish market (4.4% per year).

High Growth Revenue: SAN's revenue (5.2% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: SAN's Return on Equity is forecast to be low in 3 years time (9.1%).

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Past Performance

How has Banco Santander performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-19.5%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: SAN has high quality earnings.

Growing Profit Margin: SAN became profitable in the past.

Past Earnings Growth Analysis

Earnings Trend: SAN's earnings have declined by 19.5% per year over the past 5 years.

Accelerating Growth: SAN has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: SAN has become profitable in the last year, making it difficult to compare its past year earnings growth to the Banks industry (33.3%).

Return on Equity

High ROE: SAN's Return on Equity (10.6%) is considered low.

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Financial Health

How is Banco Santander's financial position? (This company is analysed differently as a bank or financial institution)

Financial Health Score

4/6

Financial Health Score 4/6

Asset Level
Allowance for Bad Loans
Low Risk Liabilities
Loan Level
Low Risk Deposits
Level of Bad Loans

Financial Position Analysis

Debt to Equity History and Analysis

Balance Sheet

Financial Institutions Analysis

Asset Level: SAN's Assets to Equity ratio (16.8x) is moderate.

Allowance for Bad Loans: SAN has a low allowance for bad loans (67%).

Low Risk Liabilities: 73% of SAN's liabilities are made up of primarily low risk sources of funding.

Loan Level: SAN has an appropriate level of Loans to Assets ratio (63%).

Low Risk Deposits: SAN's Loans to Deposits ratio (92%) is appropriate.

Level of Bad Loans: SAN has a high level of bad loans (3.3%).

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Dividend

What is Banco Santander current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

3.60%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: SAN's dividend (3.6%) is higher than the bottom 25% of dividend payers in the Spanish market (2.05%).

High Dividend: SAN's dividend (3.6%) is low compared to the top 25% of dividend payers in the Spanish market (5.79%).

Stability and Growth of Payments

Stable Dividend: SAN's dividend payments have been volatile in the past 10 years.

Growing Dividend: SAN's dividend payments have fallen over the past 10 years.

Current Payout to Shareholders

Earnings Coverage: With its low payout ratio (20.1%), SAN's dividend payments are well covered by earnings.

Future Payout to Shareholders

Future Dividend Coverage: SAN's dividends in 3 years are forecast to be well covered by earnings (35% payout ratio).

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Management

How experienced are the management team and are they aligned to shareholders interests?

6.4yrs

Average management tenure

CEO

Jose Antonio Alvarez Alvarez (61 yo)

no data

Tenure

€9,160,000

Compensation

Mr. Jose Antonio Alvarez Alvarez has been Vice Chairman of Banco Santander, SA since January 15, 2019 and has been its Director since November 25, 2014 and also serves as its Chief Executive Officer. Mr. A...

CEO Compensation Analysis

Compensation vs Market: Jose Antonio's total compensation ($USD9.64M) is above average for companies of similar size in the Spanish market ($USD2.62M).

Compensation vs Earnings: Jose Antonio's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: SAN's management team is seasoned and experienced (6.4 years average tenure).

Board Members

Experienced Board: SAN's board of directors are considered experienced (7 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: SAN insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/06/28 00:00
End of Day Share Price	2022/06/28 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31