Stockchase Opinions

Jim Cramer - Mad Money Banco Santander SA SAN-N BUY Oct 21, 2024

A huge Spanish bank whose presence is rapidly growing in the US. They just launched Openbank in the U.S.

$5.030

Stock price when the opinion was issued

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BUY
Banco Santander has a massive franchise and good potential to do well.
BUY
A great CEO, though he's never had the nerve to buy it. The best European bank.
DON'T BUY
European bank stocks have been hammered worse then North American ones because of the Russian war. Valuations now look cheap, like 6x PE with SAN. However, ING is better-run and trades at a similar PE, and pays a 6% dividend, so he prefers it.
BUY
If Ukraine gets settled soon, it's a great buy, as it's very cheap. Politics is getting in the way. A worldwide bank, but the bulk is in Europe. He'd prefer ING.
BUY

The stock is breaking out. They are crushing it in Mexico.

BUY

He likes European and US financials. SAN is solid and well-run, managing risks well.

WEAK BUY

The large Spanish banks are up 40-50% this year due to more tourism spending there, plus the bank's diversification across Latin American. They may leave the UK and its high taxes and laws. But the Spanish banks are 3x riskier than European ones, because the Spanish one's non-performing assets are 3% vs. the 1% average. Take this with a grain of salt. SAN is having a great year, but is coming off previous lows.

WAIT

One of the larger banks in Europe, with an international footprint. In 6 months, there's been a sea change in sentiment on investing in Europe. Banks will reap the rewards of increased spending when we come out of this tumultuous time.

It's not that the gains aren't valid, but it's come a long way in a very short time. Will probably see a bit of a pullback, a bit rich now.

TOP PICK

Probably a 10-year bull market in financial services in front of us. Global stocks underperformed for a long time, depending on where you're looking. When a market goes sideways for 10-15 years, and then makes a new high, that's the beginning of a new long-term bull market. Virtually every major global market is doing that right now.

Global stocks are much cheaper than US stocks. USD is now falling against every major currency. Great bank and digital banking platform, geographically diversified. Between 13-15% return on tangible equity. Great balance sheet. Trades at only 9x. Dividend grows nicely, buying back shares. Very good operators and allocators of capital. Global banks can be revalued compared to the rest of the world. Yield is 3.11%.

(Analysts’ price target is $6.70)