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Banco Santander: Credit Suisse returns to buy rating.

(CercleFinance.com) - This morning Credit Suisse resumed its coverage of the Spanish Banco Santander banking stock with a buy rating ("outperform"), believing that the share's potential is underestimated.
The broker has a target price of 6.1 euros for the share.

"We believe the market is underestimating the earnings contribution from the core units (Spain, Brazil and UK) due to external uncertainties (Cataluña and Brexit) and the lack of visibility on specific issues," such as the pace of the recovery, the low interest rates in Brazil, and the contribution from Banco Popular, an institution recently taken over by Santander which is on the brink of bankruptcy.

According to Credit Suisse, the market has underestimated synergies in Spain, and in 2018 the broker forecasts earnings of about 1.6 billion euros, 7% above the consensus. The broker is also more optimistic than the market on the group's Brazilian operations, while at the same time retaining a "conservative" (below the consensus) scenario for the impact of Brexit.

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