Banco Santander SA (SAN) AI Stock Analysis

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Banco Santander SA

(NYSE:SAN)

76Outperform

Banco Santander SA exhibits strong financial performance with impressive revenue growth and profitability. However, high leverage and negative cash flow are significant risks. Technically, the stock shows upward momentum, while its valuation is attractive with a low P/E ratio and decent dividend yield. The positive earnings call reinforces confidence in continued growth and profitability, despite challenges from currency devaluation and interest rates.

Banco Santander SA (SAN) vs. S&P 500 (SPY)

Market Cap

$102.20B

Dividend Yield2.23%

Average Volume (3M)6.76M

Price to Earnings (P/E)8.1

Beta (1Y)0.88

Revenue Growth6.56%

EPS Growth19.02%

CountryUS

Employees199,958

SectorFinancial

Sector Strength79

IndustryBanks - Diversified

Share Statistics

EPS (TTM)0.89

Shares Outstanding15,152,492,000

10 Day Avg. Volume9,586,334

30 Day Avg. Volume6,763,573

Financial Highlights & Ratios

PEG Ratio0.42

Price to Book (P/B)N/A

Price to Sales (P/S)1.55

Price to Cash Flow (P/CF)0.50

P/FCF Ratio0.40

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusModerate Buy

Number of Analyst Covering1

Banco Santander SA Business Overview & Revenue Model

Company DescriptionBanco Santander SA (SAN) is a multinational financial services company headquartered in Madrid, Spain. It operates in various segments including retail banking, commercial banking, global corporate banking, and wealth management. The bank has a significant presence in Europe, North America, and Latin America, providing a comprehensive range of financial products and services to individual customers, small and medium-sized enterprises, and large corporations. Its offerings include savings and checking accounts, loans, mortgages, credit cards, insurance, and investment services.

How the Company Makes MoneyBanco Santander generates revenue through several key streams: interest income from loans and advances to customers and other banks, fees and commissions from services such as asset management, insurance, and payment processing, and trading income from securities and financial instruments. The bank also benefits from its extensive branch network and digital platforms, which facilitate customer engagement and transaction volume. Strategic partnerships and alliances, as well as its diversification across various international markets, play a crucial role in bolstering its earnings and mitigating regional economic risks.

Banco Santander SA Financial Statement Overview

Summary

Banco Santander SA demonstrates strong profitability and effective operational management, as evidenced by healthy margins. However, the decline in revenue and challenges in cash flow generation could pose risks. The balance sheet remains robust, with moderate leverage and good return on equity, but careful monitoring of cash flow dynamics is necessary to sustain growth and operational efficiency.

Income Statement

Positive

Banco Santander SA shows robust profitability with a solid net profit margin of 24.75% for 2023, which is a significant improvement from the previous year. The gross profit margin remains strong, indicating efficient cost management. However, revenue has decreased by 17.45% from 2022, suggesting some challenges in top-line growth. EBIT margin is healthy at 44.48%, demonstrating effective operational management.

Balance Sheet

Positive

The company maintains a stable financial position with a debt-to-equity ratio of 3.26, reflecting moderate leverage typical for the banking industry. The return on equity stands at 11.60%, indicating good profitability relative to shareholder investment. The equity ratio is 5.31%, showing a sound capital structure. Overall, the balance sheet reflects stability and efficient capital management.

Cash Flow

Neutral

Free cash flow has significantly declined, leading to a negative growth rate, indicating potential cash flow challenges. The operating cash flow to net income ratio is 0.45, suggesting lower cash generation relative to profits. The free cash flow to net income ratio is negative, raising concerns about cash sufficiency for operations and growth investments.

TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Breakdown
Income Statement		Total Revenue
97.22B	44.76B	54.22B	48.41B	46.81B	52.32B
	Gross Profit
97.22B	59.59B	54.22B	48.41B	46.81B	52.32B
	EBIT
12.45B	19.91B	46.90B	13.02B	-3.14B	10.94B
	EBITDA
14.92B	0.00	0.00	16.87B	0.00	15.22B
	Net Income Common Stockholders
11.89B	11.08B	9.61B	8.12B	-7.71B	6.51B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
79.20B	220.34B	223.07B	210.69B	153.84B	101.07B
	Total Assets
1.28T	1.80T	1.73T	1.60T	1.51T	1.52T
	Total Debt
218.57B	310.98B	282.96B	249.02B	235.27B	261.98B
	Net Debt
139.37B	64.08B	59.89B	38.33B	81.43B	160.91B
	Total Liabilities
218.57B	1.69T	1.64T	1.50T	1.42T	1.41T
	Stockholders Equity
73.14B	95.42B	89.10B	86.93B	81.48B	100.07B
Cash Flow		Free Cash Flow
3.16B	-8.63B	16.87B	45.29B	57.63B	-10.75B
	Operating Cash Flow
3.16B	5.01B	27.71B	56.69B	66.15B	3.39B
	Investing Cash Flow
0.00	-5.37B	-3.90B	-3.71B	-7.22B	-7.23B
	Financing Cash Flow
0.00	-2.06B	-9.96B	-1.32B	-1.91B	-10.12B

Banco Santander SA Technical Analysis

Technical Analysis Sentiment

Positive

Last Price6.73

Price Trends

50DMA

6.43

Positive

100DMA

5.61

Positive

200DMA

5.19

Positive

Market Momentum

MACD

0.03

Negative

RSI

55.83

Neutral

STOCH

93.43

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SAN, the sentiment is Positive. The current price of 6.73 is above the 20-day moving average (MA) of 6.58, above the 50-day MA of 6.43, and above the 200-day MA of 5.19, indicating a bullish trend. The MACD of 0.03 indicates Negative momentum. The RSI at 55.83 is Neutral, neither overbought nor oversold. The STOCH value of 93.43 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SAN.

Banco Santander SA Risk Analysis

Banco Santander SA disclosed 41 risk factors in its most recent earnings report. Banco Santander SA reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Banco Santander SA Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HSBC	81 Outperform	$171.96B	7.99	13.74%	6.25%	6.79%	8.57%
BCS	81 Outperform	$48.30B	7.57	9.14%	2.90%	8.58%	35.39%
BBVA	78 Outperform	$78.13B	7.41	18.77%	4.41%	30.24%	28.90%
SAN	76 Outperform	$102.20B	8.07	13.16%	2.23%	6.56%	19.02%
ING	75 Outperform	$55.88B	8.51	12.75%	5.45%	4.07%	9.97%
C	65 Neutral	$116.02B	10.37	6.33%	3.49%	8.20%	49.26%
Sector *	63 Neutral	$12.75B	9.36	8.64%	84.32%	13.82%	-3.89%

* Financial Sector Average

Performance Comparison

SAN

Banco Santander SA

6.73

2.02

42.89%

BBVA

Banco Bilbao

13.48

3.01

28.75%

BCS

Barclays

14.72

5.48

59.31%

Citigroup

63.25

4.33

7.35%

HSBC

HSBC Holdings

52.50

14.36

37.65%

ING

ING Groep

18.65

3.37

22.05%

Banco Santander SA Earnings Call Summary

Earnings Call Date: Feb 5, 2025 | % Change Since: 31.19% | Next Earnings Date: Apr 30, 2025

Earnings Call Sentiment Positive

The earnings call reflects a positive sentiment overall, emphasizing record-breaking profit, strong customer and revenue growth, significant efficiency improvements, and substantial shareholder returns. While there were challenges related to currency devaluation and interest rates, these were largely offset by the company's strategic advantages.

Highlights

Record-Breaking Profit

Profit reached a record €12.6 billion, supported by both strong revenue growth and customer growth, adding 8 million customers.

Strong Capital Ratio

Santander's capital ratio ended the year at an all-time high of 12.8%, reflecting strong capital generation.

Significant Efficiency Improvement

Efficiency improved by more than 2 percentage points, with profitability RoTE increasing to 16.3%.

Successful Customer Growth

Santander grew 8 million customers across global businesses, contributing to strong revenue growth.

Revenue and Fee Income Growth

Top-line revenue grew 10% in constant euros, and fee income increased by 11%, driven by network benefits.

Significant Shareholder Returns

TNAV and dividend per share grew by 14%, and share buybacks resulted in a 15% reduction of outstanding shares.

Lowlights

Currency Devaluation Challenges

Currency devaluation in some markets, such as the Brazilian Real, posed challenges, though offset by the appreciation of the U.S. dollar.

Impact of Higher Interest Rates

Higher interest rates created challenges in retail franchises in Europe, affecting certain geographies negatively.

Company Guidance

During Santander's 2024 results presentation, the bank reported a record profit of €12.6 billion, marking the third consecutive year of record results. Santander added 8 million customers, contributing to a 10% increase in top-line revenue, and achieved a return on tangible equity (RoTE) of 16.3%. The capital ratio reached an all-time high of 12.8%, reflecting strong capital generation. Shareholder value creation was evident with TNAV and dividend per share rising by 14%. The presentation highlighted the bank's efficiency improvements, with a reduction in cost-to-income ratio to 41.8% and a cost of risk at 1.15%, better than initial guidance. The strategic focus on diversification and technology-driven transformation, including the ONE Transformation initiative, was emphasized as key to sustaining growth and profitability, with expectations to continue this momentum into 2025.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.