Banco de Sabadell (BME:SAB) Could Be 21% Below Fair Value After Amundi Deal Extension
Banco de Sabadell (BME:SAB) shares are in focus after the bank extended its fund distribution agreement with Amundi to 2035, reinforcing a long-running partnership in Spain’s savings market.
See our latest analysis for Banco de Sabadell.
At a share price of €3.68, Banco de Sabadell has seen a 9.26% 1 month share price return and a 26.10% 1 year total shareholder return, with multi year total shareholder returns very large. This points to momentum that recent news about the Amundi agreement appears to support.
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The recent share price rise and implied discount to intrinsic value sit against a slight premium to analyst targets. Is the market being too cautious on Banco de Sabadell, or already looking beyond the good news from Amundi?
Most Popular Narrative: 6.2% Overvalued
The most followed narrative values Banco de Sabadell at €3.46 per share, which sits below the latest close at €3.68, framing a modest premium. That gap is built on detailed views of asset quality, capital generation and how much investors may be willing to pay for future earnings.
Analysts are assuming Banco de Sabadell's revenue will grow by 8.3% annually over the next 3 years. Analysts assume that profit margins will increase from 28.3% today to 29.6% in 3 years time.
Curious what underpins that fair value for Banco de Sabadell? The narrative leans on compounding revenue, firmer margins and a future earnings multiple that needs to reset. Want to see exactly how those moving parts are stitched together?
Result: Fair Value of €3.46 (OVERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, Banco de Sabadell’s heavier reliance on Spain and pressure on customer margins could quickly challenge this fair value story if local conditions or competition weaken returns.
Find out about the key risks to this Banco de Sabadell narrative.
Another View on Banco de Sabadell’s Valuation
The analyst consensus suggests Banco de Sabadell is 6.2% above its €3.46 fair value estimate. Yet the SWS DCF model points to a fair value of €4.63, which is about 20.6% above the current €3.68 share price. Which signal do you treat as more important?
Look into how the SWS DCF model arrives at its fair value.
Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Banco de Sabadell for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 267 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.
Next Steps
Given the mixed signals around Banco de Sabadell, it makes sense to check the underlying data yourself and act promptly if your view differs. A useful place to start is by weighing up the 2 key rewards and 5 important warning signs.
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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.
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