EUR 100.00 For Business Accounts Only

SANTANDER: 2023-25 STRATEGIC PLAN (ANÁLISIS BANCO SABADELL)

2023-25 Strategic Plan. We do not reach the target RoTE’23-25 due to Brazil and the US. BUY.
In its 2023-25 Strategic Plan, SAN estimates a RoTE’23-25 of 15% and 17% (~13.5% BS(e)), respectively (vs. 13.4% in FY2022). This would mean between € 11.5 Bn and € 12.5 Bn of Net Profit in 2023 and 2025, respectively (+20% and +25% vs. consensus), which we do not achieve in our estimates for the time being. Doubts remain on the US (we see a risk of a € 1 Bn cut in Net Profit’23-24e by the consensus, +50% vs. BS(e)) and Brazil (we hold a cautious stance on CoR). We raise our Net Profit’23-24 estimate by +7.5%, bringing our T.P. to € 5.50/sh. (+8% vs. previously) thanks to increased interest rates. Assuming the € 11.5 Bn of Net Profit’23 (+15% vs. BS(e)) would mean a theoretical potential T.P. above € 6.00/sh. We believe the key is for doubts to be dispelled in both regions and for the FL CET1 ratio to exceed 13% in order for the rally to be consolidated.