Santander (SAN) and Webster Deal Faces Execution Risk, Says Morgan Stanley

Group 1 - Banco Santander, S.A. is considered one of the best undervalued European stocks to buy currently, despite Morgan Stanley reducing its rating to Equalweight from Overweight due to limited upside and increased execution risk related to its growth in the U.S. following the acquisition of Webster Financial [1][3] - Morgan Stanley forecasts that the Webster acquisition will yield a return on investment of 13% to 14%, which is below Santander's expectations, and anticipates a 5% to 6% increase in earnings by 2028 [3][4] - The estimates for the Webster acquisition are viewed as ambitious, as they assume cost synergies exceeding €800 million, approximately 55% of Webster's cost base [4] Group 2 - Banco Santander announced a €5 billion share repurchase, which aligns with Morgan Stanley's projections and includes a significant buyback related to the sale of its Polish operations [5] - Banco Santander is a major retail and commercial bank based in Spain, with a strong market presence in key European and American markets, focusing on consumer and business lending, deposit-taking, and payment services [6]