Banco Santander, S.A. (NYSE:SAN) is considered one of the best undervalued European stocks to buy now. Morgan Stanley downgraded SAN to Equalweight due to limited upside after a stock surge and risks related to the Webster Financial acquisition in the US.

Morgan Stanley predicts a 13% to 14% return on investment from the Webster acquisition, lower than Santander’s expectations. They anticipate a 5% to 6% increase in earnings by 2028. Comparisons to other U.S. bank mergers suggest ambitious cost synergy estimates.

SAN announced a €5 billion share repurchase, aligned with Morgan Stanley’s expectations. The bank has a strong presence in key European and Americas markets, specializing in lending, deposit-taking, and payment services, managing its capital through dividends and buybacks.

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Read more at Yahoo Finance: Santander (SAN) and Webster Deal Faces Execution Risk, Says Morgan Stanley