SAN
Banco Santander, S.A.
$12.42
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Fair Value
Trading 16.9% below fair value
You pay
$12.42
Bear
$10.01
Fair
$14.94
Bull
$17.91
Bear
$10.01
-19.4%
ROTCE 12.3% → 1.52x TBV
Fair
$14.94
+20.3%
ROTCE 16.4% → 2.27x TBV
Bull
$17.91
+44.2%
ROTCE 18.9% → 2.72x TBV
Adjust Assumptions
16.4%
9.5%
Key Value Driver
ROTCE (16.4%) vs. cost of equity (9.5%)
Implied Market Multiple
1.88x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (25 analysts)
$3.00
Divergence from AlphaVal
398%
Summary
With ROTCE of 16.4% vs. 9.5% cost of equity, fair P/TBV is 2.27x on $6.59 tangible book, implying $14.94 per share.
Warnings
Traditional cash flow models don't work well for banks — lending activity distorts how much cash the business actually generates.
Common valuation shortcuts don't apply here — for banks, interest payments are a core business cost, not overhead.
Wall Street's average price target is $3.00 (from 25 analysts). Our estimate is 398% above the consensus -- consider that gap carefully.
Financial statements were converted from EUR into USD using EURUSD at 1.1132 USD per EUR.
Key Risks
- Book value quality matters as much as level — check loan loss reserves
- Interest rate sensitivity creates non-linear earnings surprises
- Insurance reserving is actuarial, not financial — errors emerge slowly