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If you are wondering whether Banco Santander is still attractively priced after its strong run, the next sections will walk through what the current share price might imply about value.
The stock closed at €9.40 recently, with returns of 1.7% over 7 days, a 15.8% decline over 30 days, an 8.3% decline year to date, and gains of 52.5% over 1 year, 200.8% over 3 years and 277.1% over 5 years.
These moves have kept Banco Santander on the radar as investors react to ongoing sector headlines, regulatory developments and macro signals that can quickly change how banks are priced. Understanding which parts of the recent share price path are linked to sentiment versus fundamentals is key if you are trying to judge value today.
On Simply Wall St’s valuation checks, Banco Santander scores 5 out of 6 for being undervalued. This gives it a value score of 5. The rest of this article will walk through different valuation tools to interpret that score, while hinting at a more detailed way to think about value at the end.
The Excess Returns model looks at how much profit a bank can generate on its equity above the return that shareholders require, then capitalises those excess profits into an intrinsic value per share.
For Banco Santander, the starting point is a book value of €7.03 per share and a stable book value estimate of €8.15 per share, based on future book value estimates from 9 analysts. The model uses a stable EPS of €1.27 per share, sourced from weighted future return on equity estimates from 13 analysts.
The cost of equity is €0.69 per share, while the excess return, that is the profit above that cost, is €0.57 per share. This is built on an average return on equity of 15.54%. In simple terms, the model assumes Banco Santander can continue to earn returns on equity that are higher than what shareholders require and that this will be sustained on a growing equity base.
These assumptions produce an Excess Returns intrinsic value of about €17.73 per share, compared with the current price of €9.40, implying the stock is 47.0% undervalued by this method.
Result: UNDERVALUED
Our Excess Returns analysis suggests Banco Santander is undervalued by 47.0%. Track this in your watchlist or portfolio, or discover 233 more high quality undervalued stocks.
Story Continues
SAN Discounted Cash Flow as at Mar 2026
For a profitable bank like Banco Santander, the P/E ratio is a useful way to think about what you are paying for each euro of earnings, because earnings are a key driver of value for established lenders.
In simple terms, higher growth expectations and lower perceived risk usually justify a higher P/E, while slower growth or higher risk tend to align with a lower, more conservative P/E. That is why comparing a bank’s current P/E to what might be considered “normal” can help frame expectations.
Banco Santander currently trades on a P/E of 11.40x. This is close to the peer average of 11.41x and above the wider Banks industry average of 10.74x, so the stock is priced roughly in line with similar companies and slightly above the sector as a whole. Simply Wall St’s Fair Ratio for Banco Santander is 14.93x. This is a proprietary estimate of what the P/E might be, given factors such as earnings growth, profit margins, risk profile, industry and market cap. Because it adjusts for these company specific traits rather than relying only on broad comparisons, the Fair Ratio can give a more tailored view of value. With the Fair Ratio above the current 11.40x P/E, the shares screen as undervalued on this metric.
Result: UNDERVALUED
BME:SAN P/E Ratio as at Mar 2026
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Earlier it was mentioned that there is an even better way to understand valuation. Narratives on Simply Wall St let you attach a clear story about Banco Santander to the numbers by linking your view of its future revenue, earnings and margins to a forecast, a Fair Value and then a comparison with today’s price. All of this is available within an accessible tool on the Community page that updates as fresh news or earnings arrive. For example, one investor might build a more optimistic Banco Santander narrative closer to the €13.25 Fair Value, while another leans toward a more cautious €7.00 view. By seeing where your own Fair Value sits on that spectrum, you can decide whether the current share price looks high, low or roughly in line with what you think the bank is worth.
For Banco Santander, we will make it straightforward for you with previews of two leading Banco Santander Narratives:
🐂 Banco Santander Bull Case
Fair value in this optimistic narrative: €11.95
Implied undervaluation versus the recent €9.40 close: about 21.3%.
Revenue growth assumption: 14.6% a year.
Focuses on digital banking, payments and high growth markets to support earnings resilience and revenue expansion.
Leans on cost reduction and technology programs to improve efficiency and profitability over time.
Assumes ongoing buybacks and higher dividend payouts help support per share metrics if analyst forecasts play out.
🐻 Banco Santander Bear Case
Fair value in this cautious narrative: approximately €7.10
Implied overvaluation versus the recent €9.40 close: about 32.4%.
Revenue growth assumption: 8.7% a year.
Highlights reliance on current net interest margins and large technology projects that may not deliver the hoped for efficiency gains.
Flags earnings sensitivity to credit quality in areas like U.S. auto, consumer finance and Latin American corporates.
Applies a higher discount rate and lower profit margins, which pulls the fair value closer to the lower end of published analyst targets.
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.
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