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Recent share performance and business scale
Banco Santander (BME:SAN) has drawn investor attention after recent share price moves, with the stock down 1.6% over the past month and 2.8% over the past 3 months, following a 1 day decline of 1.6%.
At a last close of €10.46 and a market value of about €150.6b, the bank sits among the larger European financial institutions. It is backed by reported annual revenue of €47,374.0m and net income of €12,468.0m.
For readers tracking business trends, the bank reports annual revenue growth of 11.8% and net income growth of 14.8%. Its internal value score stands at 4 and an intrinsic discount indicator is 42.9%.
See our latest analysis for Banco Santander.
Short term momentum looks mixed, with the share price down 1.6% over the past month and 2.8% over the past quarter. At the same time, the 1 year total shareholder return of 50.8% and 3 year total shareholder return above 2x indicate that longer term holders have seen considerably stronger gains.
If this kind of performance has you thinking about where else capital could work hard, it may be worth scanning for 99 top founder-led companies
With Banco Santander trading at €10.46, an intrinsic discount indicator of 42.9% and analyst targets sitting higher, the key question for you is simple: is this a genuine mispricing or are markets already baking in future growth?
Most Popular Narrative: 14% Undervalued
Banco Santander’s most followed narrative points to a fair value of €12.12, compared with the recent close at €10.46, which implies a discount that hinges on specific growth and margin assumptions.
Analysts expect earnings to reach €20.2 billion (and earnings per share of €1.29) by about May 2029, up from €12.5 billion today. However, there is some disagreement amongst the analysts with the more bullish ones expecting earnings as high as €23.1 billion.
There is a full earnings roadmap behind that gap. It blends faster revenue growth, higher profit margins and a lower future P/E than many peers. Curious which assumptions really carry the valuation?
Analysts in this narrative run those cash flows through a discount rate of 8.57%, building up to the €12.12 fair value while also factoring in expected changes in margins and the share count over time. The result is a view that hinges on how strongly earnings and revenues track those forecasts, and whether the market ultimately accepts a lower P/E multiple than today as those numbers come through.
Result: Fair Value of €12.12 (UNDERVALUED)
Have a read of the narrative in full and understand what’s behind the forecasts.
However, this hinges on execution. Prolonged economic pressure in key markets or setbacks in Santander’s technology overhaul could quickly challenge those upbeat assumptions.
Find out about the key risks to this Banco Santander narrative.
Next Steps
With mixed signals on value, growth and execution, it is important to look under the hood yourself rather than rely on a single narrative. For a quick way to balance the upside story with potential downside, take a close look at the 3 key rewards and 5 important warning signs
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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.
Companies discussed in this article include SAN.MC.
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