Experts are convinced that now is the right time to put Banco Santander shares in your portfolio. The entity currently has best recommendation (buy) since June 2023, according to the algorithm used by this media with FactSet data. According to this criterion, it is the best advised bank within the Ibex 35, even surpassing CaixaBank, with which struggle this first position within the banking sector and which it had not exceeded since August.
If you attend The Ibex League (the handset elEconomista.es which is prepared with the averages of the consensus recommendations of Bloomberg and FactSet and which is revised every week), Santander slips into the latest review among the ten best companies of the entire index, after gaining two places last week, and occupies the best position since the month of august. Thus, with Caixa and Sabadell, these are the three banks recommended to take a position on the main Spanish benchmark.
Since the start of the year, Santander has gained almost 21% on the stock market, but analysts who monitor its behavior give it a potential upside of 25% from current levels, according to consensus data from Bloomberg, which sees its titles at 5.69 euros. Only in the reviews available to the entity in the month of October, four of the eight analysts who examine its price target give it a valuation higher than the consensus. Alphavalue is the one which gives the highest price target, i.e. 6.59 euros.
Like the rest of the banking entities, Santander sees an increase in estimated profits for 2024 compared to what was forecast in January, as experts and investors continue to trust in the solidity of the entities despite the path of lowering rates already started . on both sides of the Atlantic. For the rest of the entities, however, the profit ceiling would be reached in 2024, where all will earn more than in 2025, with the sole exception of Banco Santander. The entity led by Ana Botín will be the only one to increase its profits next year, with a slight increase of 1.2%, to 11,973 million euros.
On October 29, the company will present the results of the third quarter of the year, for which 3.162 million euros are expected, almost 9% more than the same period of last year, when it declared a net profit of 2.902 million euros. Although the decline in interest rates is not expected to bring a tailwind to banking entities, due to the narrowing of margins resulting from their reduction, experts continue to see possibilities in this environment for these companies, which “could see their business volume increase benefiting businesses and individuals from the possibility of obtaining cheaper financing”, according to Antonio Castelar, analyst at Ibroker.
Shareholder remuneration has also been another lever of Banco Santander for shareholders. A few weeks ago, the entity approved an interim dividend charged to 2023 results of 10 cents per share, or 23% more compared to the payment it distributed last year on the same dates. Distribution will take place on November 1, with profitability of 2% at current levels. October 30 is the deadline.
In relation to PER (times where profit is reflected in the share price), Banco Santander is also postulated as one of the most attractive not only within the banking sector, but also in the Ibex 35 in general. It is the fourth cheapest company in the index, behind Repsol, IAG and Unicaja, with a multiplier for 2024 of 5.9 times. The Andalusian entity is the only one in its sector to surpass it, with a PER of 5.1 times for this year.
