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Santander convention to analysts in the ‘Investor Day’ with the action at maximums

Date: March 29, 2024 Time: 19:13:08

Banco Santander has put the finishing touch on February as the protagonist of the Spanish banking sector with the celebration of its ‘Investor day’. At the event, held in London, the entity led by Ana Botín presented its growth plan for the next three years, a roadmap with which it has captivated investment banks, pushing a handful of analysts into the race for to revise this value upwards since last Tuesday.

Among them stand out Société Générale, which has raised its target price to 4.6 euros (4.5 euros previously); Morgan Stanley, which places it at 4.4 euros (previous 4.2 euros) or Berenberg, who sees it at 4.2 euros since February 3.8. HSBC, for its part, sets it at 4.8 euros, 6% more than its last review. On the other side of the coin are Alphavalue and Bestinver, who choose to update Banco Santander’s price downwards.

After a total of eighteen analysts have examined the Cantabrian firm (some have opted to maintain the previous price), the twelve-month target price of the ‘Bloomberg’ consensus has gone from 4.28 euros to 4.43 euros at the close of the European markets this Friday. This makes it the bank with the second greatest potential (17%) on the Ibex 35, only behind Unicaja Banco (21.2%) and the thirteenth on the list.

The reinforcement of the remuneration to the shareholders, which implies the increase of the ‘pay-out’ up to 50% between dividend and reward of titles, has encouraged the group on the stock market, which records a weekly rise of 9.1%, which which makes it the second selective company that appreciates the most in this period, only behind ArcelorMittal (+9.3%). It is thus aligned with the rest of the sector, which distributes between 50 and 60% of its profits, although it remains below the estimate of Credit Suisse, which was betting that it would reach 60%.

The entity with headquarters in Boadilla del Monte thus manages to boost its titles, which come from registering worse behavior than the rest of the selective banks. With this ‘acceleration’, it is positioned as the third Ibex, only behind Banco Sabadell (+46%) and Meliá (+37%), which has appreciated the most so far in 2023 after registering an advance of more than 35% in the last nine weeks. Thus, it erases the bad stock market behavior of last year, when it lost more than 4%, being the only one of its peers on the stock market that ended in negative due to its international exposure.

Corrects 70% from the all-time highs reached at the end of 2007

This ‘rally’ may also have had an influence on its third repurchase of securities worth 1,000 million, which was carried out between November 2022 and January 2023. A plan to which another program of 921 million is now added and which can contribute to the future of the stock market . The second heavyweight of the Ibex 35, with a representation in the index of 12.7% and a capitalization of 63,700 million that is close to its book value, going through a sweet moment, with the action at its highest since 2020. Specifically, It is trading at the level of mid-February 2020 (3.8 euros).

“Comfortable to meet” goals

In general, Spanish banks are experiencing a great rebound in the market encouraged by the higher interest rate rises on the horizon, contributing in this case to the fact that the bank has exceeded 9,000 million profits for the first time since Ana Botín was at the controls. In this sense, his forecast is to increase its return on tangible capital (ROTE) between 15-17% by 2025. However, analysts such as Nuria Álvarez (Renta 4) question the ambition of this objective, considering that It is a range that is “comfortable to comply with” in an environment of operational improvement thanks to the rise in rates.

“‘Investor Day’ was not a surprise in terms of strategy,” he says while highlighting the entity’s continued profile. In this regard, Banco Santander has set itself the goal of increasing its average annual income by up to 8%, a figure that will be strengthened with the expectation of reaching 200 million customers. Some figures before which Álvarez focuses on the uncertainty that exists at the present time to warn that setting three-year objectives “means tossing a coin” after the appearance of two black cinemas: the coronavirus and the war in Ukraine.

add your impression that it has “attempted to hedge against the risk of recession, as the impact of the rate awakening has not yet passed through to the real economy.” The positive note is that the prospect of increasing ROTE to those levels can translate into an increase in profits up to 10,000 million, which would mean another historical barrier for the president, according to her.

* This website provides news content gathered from various internet sources. It is crucial to understand that we are not responsible for the accuracy, completeness, or reliability of the information presented Read More

Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.
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