Banco de Sabadell SA (SABE.MC): Limited upside to consensus and valuation; initiate at Sell

研报英文原文证据摘录

Banco de Sabadell SA (SABE.MC): Limited upside to consensus and valuation; initiate at Sell

Goldman Sachs Banco de Sabadell SA (SABE.MC)

Executive Summary

We initiate coverage on Banco Sabadell with a Sell rating, with a 12-month target

price of €3.1, implying c.3% downside. Our cautious view on Sabadell is underpinned

by our expectation for i) subdued medium-term growth prospects relative to peers, with

loan growth, fee income growth and EPS growth all screening below our European banks

coverage average, ii) profitability that screens towards the lower end of our coverage,

and iii) a valuation that appears relatively demanding when viewed against the bank’s

growth and profitability profile, with Sabadell trading at a slight premium to our

European banks coverage average on our GS earnings estimates.

Sabadell has built one of the strongest SME and Corporate Banking franchises in Spain,

with this segment representing c.43% of the domestic loan book and underpinning the

bank’s structurally higher net interest margins. However, while this business mix has

historically been beneficial for margins, it also carries a higher risk profile and has

contributed to higher credit costs than some Spanish peers over time. Looking ahead,

we expect NII to recover from 1Q26 levels, supported by lending growth, a lower deposit

beta and contributions from the ALCO portfolio. Nevertheless, we forecast overall

lending growth of only c.3% annually through 2028E, below our European banks

coverage average, reflecting a more moderate growth outlook in both mortgages and

commercial lending. We also note that Sabadell has historically grown NII less than our

coverage average, while reliance on fee income is relatively smaller than some of the

peers and fee margins remain under pressure.