Santander leads the dynamic banking sector, attracting renewed interest from analysts and investors after a strong start to the year.
Initially, Bradesco BBI dramatically shifted its recommendation from sell to buy.
Soon after, Bank of America (BofA) also upgraded its advice from neutral to buy, raising the stock’s target from R$32 ($6.27) to R$36 ($7.06).
This adjustment represents a commendable 21% increase over the current price of R$29.60 ($5.80).
Such a shift was not without foundation. The first quarter of 2024 witnessed a significant turnaround for Santander, with net profits jumping 41% from the previous year.
These gains stem from strategic moves and favorable economic conditions, including lowered national interest rates.
These adjustments clearly paid off. Santander saw a notable drop in delinquency rates, reaching a two-year low.
Additionally, the bank enjoyed a positive market margin for the first time in the same period, adding R$333 million ($65.29) to its treasury.
BofA analysts believe these trends will boost Santander’s profits by an extra R$5 billion ($980.39) this year, while also accelerating loan growth.
Meanwhile, Santander’s financial strategies have significantly improved asset quality. The share of renegotiated assets fell from 7.5% to 6%, indicating continuous improvement.
These advancements put Santander on a path to impressive equity returns, with projections of 15% in 2024 and 17% in 2025, a rise from a previous rate of 12.3%.
Despite a recent 7.8% rise in stock price, the bank still faces a year-to-date loss of the same magnitude.
However, Santander Brazil’s market capitalization remains robust at R$111.74 billion ($21.93 billion).
This story of recovery and resilience highlights why Santander’s performance is not only a victory but also a beacon for investors seeking solid returns in a rejuvenating market.
Santander Group
Santander Brasil plays a key role in the Santander Group, driving profitability and supporting its strategic growth.
Its strong market presence and robust performance in Brazil bolster the Santander Group’s global stability and expansion.