Santander Resetting Brazil down, valuation tighter, structural narrative angles still in place

Research evidence excerpt

Santander Resetting Brazil down, valuation tighter, structural narrative angles still in place

Global Research

13 July 2026ab

Santander Equities

SpainResetting Brazil down, valuation tighter,

structural narrative angles still in place Banks, Ex-S&L

12-month rating Buy

12m price target €13.50Valuation tighter, structural narrative angles still in place

Prior : €12.70

Edging CABK/BCP by a small margin, SAN remains the best Iberian stock YTD (+23%)

and has outperformed the sector by 8pp. Like many banks in our coverage, this Price (10 Jul 2026) €12.14

sustained spell of share price strength implies additional upside appears necessarily more RIC: SAN.MC BBG: SAN SM

limited, which together with (we believe) the need to rebase Brazilian earnings down

might warrant some short term caution in the run up to 2Q results. That said, we are still Trading data and key metrics

comfortable about the key structural angles backing the stock's narrative remaining in 52-wk range €12.51-7.14

place, namely faster EPS growth (+18% 25-28E CAGR) and ROTE uplift (19.5% YE28E Market cap. €178b/US$203b

vs c15% YE25) than the sector average (c12% and 15% to 17.5% respectively). In Shares o/s 14,678m (ORD)

addition, we continue to see a swift delivery of those targets prolonging the rerating Free float 99%

initiated last year, a lever more difficult to activate for domestic banks. Buy reiterated Avg. daily volume ('000) 22,501

Avg. daily value (m) €247.9

Resetting Brazilian estimates down, offsets coming from US/Spain/UK Common s/h equity (12/26E) €107b

Similar to the argument used with Turkey and BBVA earlier in the year, we see Brazil's P/BV (12/26E) 1.6x

earnings normalisation delayed by slower than expected rate cuts, which has negative Tier 1 ratio 14%