Does Santander (BME:SAN) Offer Opportunity After A 81% One Year Share Price Jump

Simply Wall St

Tue, February 17, 2026 at 3:09 PM GMT+9 6 min read

In this article:

SAN

-1.58%

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If you are wondering whether Banco Santander's recent share price puts it on sale or already reflects the good news, you are in the right place for a clear look at what the numbers say about value.

The stock has pulled back over the last week with a 5% decline, sits slightly positive year to date at 0.4%, and has a 81.4% return over 1 year and 221.2% over 3 years, while the 5 year return is 310.8%.

Recent coverage has focused on Banco Santander's role as a major European bank and its positioning within global financial markets, which has kept investor attention on its capital strength and growth plans. Commentary around sector wide regulatory trends and interest rate expectations has also shaped how investors are thinking about risk and reward for large banks like Santander.

On our checks, Banco Santander earns a valuation score of 5 out of 6. Next we will unpack how different valuation approaches line up with that result and why there may be an even better way to think about value by the end of this article.

Banco Santander delivered 81.4% returns over the last year. See how this stacks up to the rest of the Banks industry.

Approach 1: Banco Santander Excess Returns Analysis

The Excess Returns model looks at how much profit a bank can generate above the return that shareholders require, based on its equity. Instead of focusing on cash flows, it starts from the balance sheet and earnings power to assess what each share could be worth.

For Banco Santander, the model uses a Book Value of €6.82 per share and a Stable EPS of €1.06 per share, based on weighted future Return on Equity estimates from 10 analysts. The Average Return on Equity used is 13.24%, versus a Cost of Equity of €0.68 per share. The difference between the earnings generated and the required return, the Excess Return, is €0.37 per share.

The model also assumes a Stable Book Value of €7.99 per share, sourced from weighted future Book Value estimates from 7 analysts. Combining these inputs, the Excess Returns model arrives at an estimated intrinsic value of €14.22 per share, which implies the stock is 27.6% undervalued relative to the current market price.

Result: UNDERVALUED

Our Excess Returns analysis suggests Banco Santander is undervalued by 27.6%. Track this in your watchlist or portfolio, or discover 221 more high quality undervalued stocks.

SAN Discounted Cash Flow as at Feb 2026

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Banco Santander.

Story Continues  

Approach 2: Banco Santander Price vs Earnings

The P/E ratio is a useful way to look at profitable companies like Banco Santander because it links what you pay for each share to the earnings that business is currently generating. Investors usually accept a higher or lower P/E depending on what they expect for future earnings growth and how risky they feel those earnings are.

Banco Santander currently trades on a P/E of 10.65x. That sits below the Banks industry average of 11.18x and also below the peer group average of 11.38x, which can suggest the market is applying a discount compared to similar companies.

Simply Wall St’s Fair Ratio for Banco Santander is 12.89x. This is a proprietary estimate of what the P/E might look like given the company’s earnings profile, industry, profit margins, size and risk characteristics. It goes further than a simple comparison with peers or the wider industry because it adjusts for factors that can make two banks with the same raw P/E look quite different in terms of risk and earnings quality.

With a Fair Ratio of 12.89x compared with the current 10.65x, Banco Santander’s P/E sits below that fair range on this framework.

Result: UNDERVALUED

BME:SAN P/E Ratio as at Feb 2026

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Upgrade Your Decision Making: Choose your Banco Santander Narrative

Earlier we mentioned that there is an even better way to understand valuation. Narratives on Simply Wall St let you write a clear story about Banco Santander, link that story to a set of forecasts for revenue, earnings and margins, turn those forecasts into a Fair Value, then compare that Fair Value with the current price inside the Community page. Your view is kept up to date as new news or earnings arrive. For example, one investor might build a more upbeat Banco Santander Narrative around a Fair Value of €11.10, while another might take a more cautious stance around €7.10. This gives you a simple way to see how different perspectives translate directly into numbers you can use in your own decision making.

For Banco Santander, however, we will make it really easy for you with previews of two leading Banco Santander Narratives:

🐂 Banco Santander Bull Case

Fair value: €10.73 per share

Implied discount to this fair value: 4.1% compared with the last close of €10.29

Revenue growth assumption: 9.64% a year

Analysts link long term revenue and earnings potential to digital banking, efficiency programs and a broad mix of businesses across Europe and the Americas.

The forecasts incorporate revenue growth, slightly lower profit margins and a future P/E of about 12.2x to support the current analyst fair value estimate.

This view treats the current share price and consensus target as being broadly in line, so the focus is on earnings stability, buybacks and income rather than a large valuation gap.

🐻 Banco Santander Bear Case

Fair value: €7.10 per share

Implied premium to this fair value: 44.9% compared with the last close of €10.29

Revenue growth assumption: 8.67% a year

The more cautious analysts focus on how earnings could come under pressure from rate cuts, heavier technology spending and competition in fee based businesses.

Their forecasts assume profit margins easing, a lower future P/E of about 9.8x and a higher discount rate, which together point to a fair value below the current price.

This narrative still uses growing revenues and earnings, but views the market as pricing in more optimism than these risk adjusted assumptions support.

If you want to see how both stories evolve in real time, and how other investors are framing the same data, you can use the Community Narratives on Simply Wall St to build and track your own view alongside these.

Do you think there’s more to the story for Banco Santander? Head over to our Community to see what others are saying!

BME:SAN 1-Year Stock Price Chart

_ This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned._

Companies discussed in this article include SAN.MC.

Have feedback on this article? Concerned about the content? Get in touch with us directly._ Alternatively, email editorial-team@simplywallst.com_

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