The upbeat corporate earnings season so far is driving bullish trends in the U.S. stock market. The benchmark indices have delivered a stellar performance this week. The S&P 500 notched its seventh straight win on October 21, marking a record close at 4,549.78. The index also hit a 4,551.44 intraday high. The Dow Jones Industrial Average rose to its all-time high on October 20, although it retreated slightly to close at 35,603.08 in its last trading session.
Solid corporate earnings reports have eased investors’ worries about inflation and a possible decline in Federal Reserve’s bond-buying. “There are no signs of widespread erosions of margins at the moment,” said Jim Reid, head of thematic research at Deutsche Bank. Moreover, Jobless claims declined to a new pandemic low of 290,000 for the week ended October 16.
Banco Santander, S.A. (SAN)
SAN is a Spain-based retail and commercial bank. It provides various banking products and services to individuals, small- and medium-sized enterprises, and large companies worldwide.
On October 20, SAN announced the extension of its tender offer to acquire all outstanding shares of common stock of Santander Consumer USA Holdings Inc. (S.C.) for $41.50 per share. S.C. is a finance company focused on vehicle finance, third-party servicing, and delivering superior service to more than 3.1 million customers across the entire credit spectrum. If the acquisition is successful, SAN should be able to enhance its credit services and take advantage of S.C.’s customer base while strengthening its position in the global financial sector.
SAN’s total income increased 1.9% year-over-year to €22.70 billion ($26.43 billion) in its fiscal six months, ended June 30. Its net operating income grew 6.5% from its year-ago value to €12.32 billion ($14.34 billion). Furthermore, its profit before tax and the profit attributable to the parent improved substantially from their negative year-ago values to €6.91 billion ($8.04 billion) and €3.68 billion ($4.28 billion), respectively.
The Street expects SAN’s revenues to increase 3.6% year-over-year to $52.95 billion in the next year. The company’s EPS is expected to increase 9.3% from the current year to $0.47 in the next year. And its EPS is expected to increase 194.7% per annum over the next five years.
Over the past year, the stock has gained 103.5% in price to close yesterday’s trading session at $3.88. It has also gained 14.5% over the past month.
SAN has an overall B rating, which equates to Buy in our proprietary POWR Ratings system. The POWR Ratings are calculated considering 118 distinct factors, with each factor weighted to an optimal degree.
The stock also has a B grade for Stability. It is ranked #11 out of the 97 stocks in the Foreign Banks industry.
To see POWR Ratings for Growth, Value, Momentum, Sentiment, and Quality, click here.
VEON Ltd. (VEON)
VEON provides mobile and fixed-line telecommunications services. It also offers voice, data, and other telecommunication services through a range of wireless, fixed, and broadband internet services. VOEN is headquartered in Amsterdam, the Netherlands.
On September 7, VEON announced an increase in its investment in ShopUp, Bangladesh’s leading full-stack B2B commerce platform. “ShopUp has proven itself to be an innovator in mobile e-commerce and is a venture that we are proud to be partnering with. This round will allow ShopUp and Banglalink to broaden our services offer for Bangladesh’s micro and SMEs, which are the backbone of the nation’s retail industry,” said Erik Aas, CEO of Banglalink, VEON’s mobile operator in Bangladesh.
In August, VEON announced that its mobile operator in Russia, Beeline, would collaborate with Russia’s Sechenov Medical University to develop Artificial Intelligence (AI) software and data analytics to provide early diagnosis of acute diseases and conditions across traumatology and histology. The collaboration demonstrates VEON’s prowess in the growing AI and analytics domain. In October, beeline signed an agreement with Sechenov University to create an AI Laboratory for research and development into new technology solutions for healthcare.
For the second quarter, ended June 30, VEON’s total revenue increased 9.2% from the same period last year to $2.07 billion. Its EBITDA rose 8.7% year-over-year to $879 million. In addition, its operating profit came in at $374 million, reflecting a 14.2% increase year-over-year, while its net cash from operating activities stood at $602 million, up 25.4% from the same period last year.
A $2.13 billion consensus revenue estimate for the current quarter, ending December 2021, indicates a 6.6% improvement from the prior-year quarter. Analysts expect the company’s EPS to come in at $0.09 in the current quarter, indicating a 200% rise year-over-year.
VEON’s shares have gained 73.6% over the past year and 48.3% year-to-date to close yesterday’s trading session at $2.24.
VEON’s sound fundamentals are reflected in its POWR Ratings. VEON has an overall A, which equates to Strong Buy in our proprietary POWR Ratings system. The stock has a B grade for Growth, Value, and Quality. Among the 48 stocks in the A-rated Telecom – Foreign industry, VEON is ranked #6.
Click here to view additional VEON ratings for Momentum, Sentiment, and Stability.
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SAN shares were trading at $3.87 per share on Friday afternoon, down $0.01 (-0.26%). Year-to-date, SAN has gained 26.89%, versus a 22.28% rise in the benchmark S&P 500 index during the same period.
About the Author: Subhasree Kar
Subhasree’s keen interest in financial instruments led her to pursue a career as an investment analyst. After earning a Master’s degree in Economics, she gained knowledge of equity research and portfolio management at Finlatics. More...
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