NS Itaú BBA make a recommendation Bank of Brazil (BBAS3) from market performance (expected performance in line with market average) to outperforming (expected performance above market average) due to an attractive combination of Evaluation Asymmetric, low outlook and relatively safe dividend growth prospects for 2022.
Analysts have chosen Banco do Brasil to be the top choice among financial institutions with large capitalization. Even in the most conservative scenario (lower demand for credit, higher NPLs [Non Performing Loans, ou créditos não produtivos] and/or higher financing costs), Itaú BBA sees a good growth path for the bank.
“The Bank of Brazil will be less affected by these factors, and we estimate it will achieve 10% earnings growth in 2022,” the analysis team said.
In addition to the positive value thesis, Itaú BBA highlighted the company’s resilience. In the words of the institution, Banco do Brasil’s credit portfolio should be relatively defensive against the macroeconomic scenario of low growth and higher interest rates, and strong savings deposits could mitigate the rate effect. Selic Larger.
“B” means “cheap”
According to Itaú BBA, Banco do Brasil shares are trading at 0.6 times P/VP (price above book value) and beyond, which is 0.9 times below the historical average of 0.9 times and at a discount of 60% for Brazilian banks, compared to 50% dated.
Analysts understand that investors are pricing significant levels of policy risk, as in 2016. They note that for this period, the state-owned company currently has better credit quality, capital and returns.
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