|
We are cutting our rating on Banco Santander to Sell from Buy following the recent surprise announcement of a rights offering. On November 10, 2008, Santander stated that they would be issuing 1.599 billion new shares through a rights offering at a price of 4.50 per share for a total capital increase of 7.2 billion.
As a result, we are reducing our EPADS estimates $2.03 from $2.05 for 2008 and to $1.79 from $2.25 for 2009. The share increase combined with deteriorating economic conditions in Spain and appreciation of the US$ against the will likely depress Santander's share price over the near term.
Santander reported third quarter net earnings of 2.2 billion, up 6% year over year. The rise in nonperforming loans was the only sour note in an otherwise satisfactory performance, especially relative to European peers.
|
Sponsored Links 
