Find your next quality investment with Simply Wall St’s easy and powerful screener, trusted by over 7 million individual investors worldwide.
Investors may be asking whether Banco Santander’s share price still offers value after a strong run, or if most of the opportunity is already reflected in the current €10.52 level.
The stock has posted returns of 7.2% over the last 7 days, 6.7% over 30 days, 2.6% year to date and 92.8% over 1 year, with a very large 3 year gain and a 323.1% return over 5 years.
Recent coverage has focused on Banco Santander as a major European bank with global reach, its role in financing across Europe and Latin America, and its exposure to interest rate and credit conditions in those regions. This context is helping shape how investors interpret the recent share price performance and potential risk profile.
Banco Santander currently has a value score of 3/6. The rest of this article will walk through the key valuation methods behind that score and will finish by looking at a broader way to think about what the market is really pricing in.
The Excess Returns model looks at how much value a bank can create over and above the return that equity investors require. It starts with current book value, estimates sustainable earnings on that equity, then compares those earnings to the cost of equity to see whether the bank is generating surplus value.
For Banco Santander, book value is €7.03 per share, with a stable earnings per share estimate of €1.26, based on weighted future Return on Equity estimates from 13 analysts. The average Return on Equity used in the model is 15.38%, while the cost of equity is €0.69 per share, leaving an estimated excess return of €0.57 per share. The model also uses a stable book value estimate of €8.16 per share, sourced from nine analyst forecasts.
Combining these inputs, the Excess Returns model arrives at an intrinsic value of €17.80 per share. Compared with the current share price of €10.52, this implies the stock is 40.9% undervalued according to this framework.
Result: UNDERVALUED
Our Excess Returns analysis suggests Banco Santander is undervalued by 40.9%. Track this in your watchlist or portfolio, or discover 231 more high quality undervalued stocks.
SAN Discounted Cash Flow as at Apr 2026
P/E is a common way to value profitable companies because it links what you pay for each share to the earnings that share currently generates. A higher P/E usually reflects higher growth expectations or a lower perceived risk, while a lower P/E can point to lower expected growth or higher risk.
Story Continues
Banco Santander currently trades on a P/E of 12.70x. This sits above the Banks industry average P/E of 11.27x and is also slightly higher than the peer group average of 12.32x. On the surface, that suggests the market is willing to pay a modest premium compared with the broader sector.
Simply Wall St’s Fair Ratio concept goes a step further. It estimates what a “normal” P/E might be for Banco Santander based on factors such as its earnings growth profile, profit margins, industry, market cap and risk characteristics. This tends to be more tailored than a simple comparison with peers or industry averages, which do not adjust for these company specific features.
For Banco Santander, the Fair Ratio is 15.88x, above the current 12.70x P/E. On this preferred multiple basis, the shares appear undervalued relative to the Fair Ratio benchmark.
Result: UNDERVALUED
BME:SAN P/E Ratio as at Apr 2026
P/E ratios tell one story, but what if the real opportunity lies elsewhere? Start investing in legacies, not executives. Discover our 95 top founder-led companies.
Earlier it was mentioned that there is an even better way to understand valuation. On Simply Wall St’s Community page you can use Narratives, which let you set your own story for Banco Santander by linking your view of its revenue, earnings and margin outlook to a forecast and fair value. You can then compare that fair value with the current share price. Each Narrative updates automatically when new news or earnings arrive. For example, one investor might align with the higher analyst fair value near €13.25 based on confidence in digital banking, cost efficiency and high growth markets. Another might lean toward the lower end around €7.10 if more cautious about regulation, credit quality and technology execution.
For Banco Santander, however, we will make it really easy for you with previews of two leading Banco Santander Narratives:
🐂 Banco Santander Bull Case
Fair value in this bullish Narrative: €11.90
Implied discount to this fair value at the last close of €10.52: about 11.6%.
Analyst revenue growth assumption used in this Narrative: 14.32% a year.
Focuses on expansion in digital banking, payments and high growth markets, alongside cost efficiency programs that are expected to support earnings stability and revenue growth.
Highlights the role of a diversified footprint across Europe and Latin America, plus technology transformation, in supporting fee income, lower unit costs and profitability.
Flags risks around regulation, legal matters, technology execution and exposure to emerging market cycles, and suggests cross checking the analyst assumptions with personal expectations.
🐻 Banco Santander Bear Case
Fair value in this bearish Narrative: €7.10
Implied premium to this fair value at the last close of €10.52: about 48.2%.
Bearish analyst revenue growth assumption used in this Narrative: 8.67% a year.
Emphasises sensitivity to interest rate cuts, large scale tech projects and a push into fee based businesses that could leave costs high if growth slows.
Points to added complexity from digital platforms and greater exposure to unsecured and cyclical lending, which could raise credit and compliance costs.
Assumes a lower earnings growth path, tighter margins and a lower P/E multiple, leading to a fair value that sits well below the current share price in this scenario.
Do you think there’s more to the story for Banco Santander? Head over to our Community to see what others are saying!
BME:SAN 1-Year Stock Price Chart
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.
Companies discussed in this article include SAN.MC.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com