Banco Santander: Why The 'New Era' Makes A 10x P/E Look Cheap

Kenio Fontes2.18K FollowersFollow5ShareSavePlay(9min)CommentsSummaryBanco Santander, S.A. enters a "growth phase" through 2028, targeting 210 million customers and significant efficiency gains.SAN aims to reduce its efficiency ratio to 36% by 2028, leveraging AI automation and acquisition synergies for operational improvement.Management targets €20B underlying profit and 20% RoTE in 2028, implying a forward P/E of 6.9x and potential dividend yield on cost of 7%.I maintain a Buy rating on SAN, citing strong execution, attractive valuation, and a healthy margin of safety despite transformation risks.

Getty Images About 6 months ago (check it here), when I did my first coverage of Banco Santander, S.A. (SAN), I defined it as a “simple” case. A global bank, which was in a transition to digital, with several initiatives for efficiencyThis article was written byKenio Fontes2.18K FollowersFollowEquity Research Analyst with a broad career in the financial market, covered both Brazilian and global stocks. As a value investor, my analysis is primarily fundamental, focusing on identifying undervalued stocks with growth potential. Feel free to reach out for collaborations or to connect!Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.