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Chicago, IL – November 4, 2025 – Zacks Equity Research shares Banco Santander SAN as the Bull of the Day and Cogent Communications CCOI as the Bear of the Day. In addition, Zacks Equity Research provides analysis on McDonald's Corporation MCD, Macy's M and Dutch Bros Inc. BROS.
Here is a synopsis of all five stocks.
As a prelude to this Bull of the Day scenario, I can recall several European bank stocks that have traded at depressed levels of $10 a share or lower in recent years and have now more than doubled to new peaks of around $20 or higher.
Some of these ADRs include Barclays, Deutsche Bank and Spain-based BBVA, also known as Banco Bilbao Vizcaya Argentaria. Ironically, Banco Santander could be the next European bank stock to join this list as not only the largest bank in Spain, but the biggest international bank in Latin America.
Keeping this scenario in mind, Banco Santander stock currently sports a Zacks Rank #1 (Strong Buy) and should be attracting the attention of bulls and value investors.
The Top Performer in a Blazing Industry
At the moment, the Zacks Banks-Foreign Industry is currently in the top 27% of over 240 Zacks industries. Starting to post more robust earnings, European bank stocks have stood out in particular, driven by higher interest income and cost-cutting measures. Banco Santander has led the way by further fueling investor sentiment with aggressive stock buybacks and dividend increases.
Hitting a new 52-week high of $10 a share, Banco Santander’s ADR has soared over +120% in 2025. Still, relative to its peers, especially BBVA, Banco Santander stock is making the case for more upside.
Operational Improvements & Positive EPS Revisions
Year to date, Banco Santander’s profit is up 11% from the first nine months of 2024 to $11.52 billion. Signaling efficient capital use is that Banco Santander’s return on tangible equity (RoTE) has climbed to new peaks of 14% and edges the industry average of 12.7%.
Most influential to its strong buy rating is that in the last 60 days, fiscal 2025 and FY26 EPS estimates are up over 2% and 5% respectively. Furthermore, Banco Santander’s EPS is now expected to leap 21% this year and is projected to increase another 8% in FY26 to $1.09.
Banco Santander’s Attractive Valuation
Making the trend of rising EPS revisions more attractive is that Banco Santander stock still trades at a reasonable 10X forward earnings multiple, which is well below the benchmark S&P 500’s 25X and a slight discount to its industry average of 11X.
Plus, SAN trades at par with the industry average of less than 2X sales compared to the S&P 500’s 5X, with Banco Santander expected to bring in more than $70 billion in annual revenue for the foreseeable future.
Stock Buybacks & Dividend Increases
Planning to return at least $11 billion to shareholders through buybacks and dividends from its FY25 and FY26 earnings, SAN currently has a very generous 1.88% annual dividend yield for a stock that trades at $10. While this is slightly below the industry average of 2.32%, Banco Santander’s yield does top the benchmark’s 1.07%.
More intriguing is that Banco Santander has increased its dividend eight times in the last five years, with a very impressive annualized growth rate of 48.71% during this period. It’s also noteworthy that Banco Santander’s 21% payout ratio indicates there is plenty of room for more dividend hikes in the future.
Bottom Line
Despite an impressive performance this year, Banco Santander’s cheap stock price reflects that its ADR is still flying somewhat under the radar. To that point, these massive shareholder returns are being funded by record capital generation as Banco Santander’s Common Equity Tier 1 ratio (CET1) has hit a new high of 13.1%.
With the CET1 ratio being a clear measure of a bank’s financial strength and resilience, it's even more promising that Banco Santander added 7 million new clients during Q3, showing strong global growth with over 170 million customers worldwide.
Landing a Zacks Rank #5 (Strong Sell) and the Bear of the Day, Cogent Communications is a stock that investors will want to avoid amid widening losses and concerns over its financial stability.
After gaining steam during the COVID-19 pandemic, Cogent has been hit with a dose of reality in a high-debt and competitive operational landscape that includes traditional internet service providers (ISPs) such as Comcast, AT&T and Verizon.
On top of this, Cogent is competing with managed enterprise connectivity platforms offered from companies like Lumen Technologies and Nexxen International.
Falling nearly 50% year to date, Cogent stock is still trading at a somewhat unfathomable stock price of $40 a share and looks due for a further drop.
Profitability Concerns & Slower Revenue Growth
Correlated with its bearish price performance, Cogent has reported a net loss of $109.8 million in 2025, compared to -$97.6 million up to the same period last year.
Notably, Cogent will be reporting Q3 results this Thursday, November 6, with Zacks estimates calling for the company to post an adjusted EPS loss of -$1.15 (Current Qtr below). While this would be a modest improvement from an adjusted loss of -$1.33 a share in the prior year quarter, Cogent is well away from posting positive EPS for the time being.
The other issue is that Cogent is seeing slower sales growth, with the company’s top line being stuck in the $1 billion or lower range after soaring from $568 million in 2020, thanks to a boost from higher internet usage during the pandemic.
Cash Burn & High Debt Levels
Raising more concern is that Cogent has already burned over $100 million in free cash flow (FCF) this year, with trailing twelve-month (TTM) FCF at -$233 million.
Making things worse is that Cogent has nearly $2 billion in debt and just $307 million in cash & equivalents. Putting this in perspective, CCOI has a very high debt-to-capital ratio of 97% compared to the preferred level of 40% or less, with its Zacks Wireless National Industry average at 54%.
Bottom Line
Cogent Communications’ stock has the remnants of a value trap that attracts investors with a lucrative annual dividend (9.84%) that it might eventually need to cut due to deteriorating cash flow and high debt. Considering Cogent's bearish stock performance looks likely to continue, chasing a payout from CCOI shares is not worth it.
Key Factors for McDonald's Upcoming Q3 Earnings Report
McDonald's Corporation is slated to release third-quarter 2025 results on Nov. 5, before the opening bell. In the last reported quarter, the company’s earnings beat the Zacks Consensus Estimate by 1.3%. MCD surpassed earnings estimates in three of the trailing four quarters, and met once. The average surprise for this period is 1%, as shown in the chart below.
Trend in Estimate Revision
The Zacks Consensus Estimate for third-quarter earnings per share (EPS) has decreased to $3.35 from $3.40 in the past 30 days. The estimated figure indicates a 3.7% increase from the year-ago EPS of $3.23. The consensus mark for revenues is pegged at $7.07 billion, indicating 2.8% year-over-year growth.
What the Zacks Model Unveils for MCD Stock
Our proven model does not predict an earnings beat for McDonald's this time around. The combination of a positiveEarnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that’s not the case here.
MCD’s Earnings ESP: McDonald's has an Earnings ESP of -1.09%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
McDonald's Zacks Rank: The company carries a Zacks Rank #4 (Sell) at present.
Factors Influencing MCD’s Q3 Performance
McDonald’s top-line performance in the third quarter of 2025 is likely to have been driven by continued growth in global comparable sales, supported by steady customer traffic, menu innovation, digital engagement and ongoing expansion initiatives. The company’s emphasis on strategic marketing and its efforts to make its platform as affordable as possible have likely resonated well with consumers, particularly in an increasingly value-conscious environment.
McDonald’s strong performance across major international markets is also expected to have supported its upcoming quarterly results. The company’s meal bundles and Everyday Affordable Price menus have been particularly successful, especially as Europe continues to face high inflation. These value-driven offerings and affordable options have enhanced customer perception of value and affordability across most of its key markets.
We expect third-quarter total U.S. revenues to increase 0.1% year over year to $2,675.3 million. Revenues from total International Operated Markets are expected to be $3,343.3 million, indicating a 2.4% increase year over year. Total International Developmental Licensed Markets & Corporate revenues are expected to increase 6.9% year over year to $865.6 million.
Continuous menu innovation and the implementation of the Accelerating the Arches strategy, along with initiatives such as the $5 meal deal and Edge — the company’s digital foundation for restaurant innovation — are expected to have added to the growth momentum. Together, these factors have likely helped offset macroeconomic headwinds and kept revenue growth on a solid trajectory.
However, ongoing macroeconomic uncertainties, including elevated inflation and persistently low quick-service restaurant traffic in the United States, continue to challenge the company by pressuring consumer discretionary spending and are likely to impact its bottom line. Additionally, rising cost pressures — particularly in Europe — are expected to have weighed on margins despite MCD’s pricing initiatives.
McDonald's Corporation price-eps-surprise | McDonald's Corporation Quote
Stocks with the Favorable Combination
Here are some companies in the Zacks restaurants sector that, according to our model, have the right combination of elements to post an earnings beat in the quarter to be reported.
Macy's currently has an Earnings ESP of +22.81% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
In the to-be-reported quarter, Macy's earnings are expected to register a 450% year-over-year decrease. Macy's earnings surpassed estimates in three of the trailing four quarters, missed on one occasion, with an average beat of 25.8%.
Dutch Bros Inc. currently has an Earnings ESP of +6.93% and a Zacks Rank of 2.
In the to-be-reported quarter, Dutch Bros’ earnings are expected to increase 6.3%. Dutch Bros’ earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 91.9%.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index.Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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This article originally published on Zacks Investment Research (zacks.com).
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