Banco-Santander Retains Buy Rating at Deutsche Bank
Monday, November 28, 2021 1:49 PM

Analysts at Deutsche Bank reiterated Buy rating on the shares of Banco-Santander Chile (NYSE: SAN) with a price target of $85. They state that while the offering could still present some overhang risk until it is completed given its large size of $900 million, they find significant value in the stock at current levels.

On Friday, SAN filed a statement with the U.S. Securities and Exchange Commission stating that Santander Spain will not sell any more shares of Santander Chile for at least one-year from the completion of the recently announced offering for 8 percent of the bank. Santander Spain would lose certain majority rights with less than 2/3 ownership of Santander Chile. Santander Chile            is down 12 percent since Santander Spain announced that it would sell 8 percent of the shares last week, compared to a 6 percent decline for the IPSA and a negative 7 percent for Banco de Chile. Analysts believe that SAN should be able to deliver one of the highest return-on-equities in the world for a bank of 25 percent with a very well regarded management team. They lowered their FY2011 earnings estimate by 12 percent to CLP453 billion, given weaker than expected FY2011 Q3 results. They reduce their FY2012 and FY2013 estimates by 6 percent each year, given higher provision charges and expenses.

On a year-to-date basis, SAN’s share performance was -20.89 percent, and as compared to Standard & Poor’s, it has an YTD share performance of -18.16 percent.

Banco-Santander provides commercial and retail banking services to corporate and individual customers in Chile. It has a market capitalization of $11.76 billion with a P/E ratio of 15.58. It has more than 181 million outstanding shares.   

Shares of SAN gained 3.45 percent, or $2.16, to trade at $64.85.