Kepler downgrades Santander to 'hold' on portfolio reshuffle disruptions

Erste Bank Polska SA

01/08/2025 13:31

** Kepler Cheuvreux downgrades Spain's Banco Santander SAN.MC from "buy" to "hold", considering that changes in the group's portfolio are bound to create some disruption

** It cuts the bank's price target from 8.10 euros ($9.24) to 7.54 euros, as the prior estimate assumed that proceeds from the sale of Santander Polska SPL1.WA would be returned to shareholders

** The changes in the portfolio - the sale of its Polish unit and the acquisition of Britain's TSB - were "spot on strategically", broker says

** However, it highlights that disruptions caused by this shuffling will bring transformation costs, calling 2025-2026 transition years

** "We anticipate a RoTE of 15% for 2025-26E, followed by a renewed take-off in 2027E, which we believe is a bit too early to price in now," it adds

** Out of 24 analysts that cover Banco Santander, 19 rate the stock "strong buy" or "buy", ​five rate it "hold", according to data compiled by LSEG

($1 = 0.8764 euros)

 (Reporting by Javi West Larrañaga)

 ((javier.west@thomsonreuters.com; +34 918 35 61 12))