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Tuesday, October 4, 2022

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    Banco do Brasil (BBAS3) can still rise 18% by the end of the year, says Bradesco BBI

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    Bradesco BBI classified the second quarter of Banco do Brasil as “impressive” (Image: Agência Senado)

    O Bradesco BBI raised the target price for the stock Bank of Brazil (BAAS3) by 16%, to R$52 by the end of 2022, equivalent to an upside potential of around 18%. The bank reiterated the buy recommendation.

    According to analysts Gustavo Schroden and Maria Clara Negrão, the state bank’s share is traded at a price-to-earnings (P/E) multiple of 4 times and 0.7 times price-to-book value (P/VPA) in 2022.

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    They say the values ​​are the result of “strong earnings growth and high profitability, along with positive earnings momentum”.

    Increase in Banco do Brasil’s profit

    Bradesco BBI rated Banco do Brasil’s second quarter as “impressive” and said it had increased its recurring net income estimates by 11.5% for 2022 and 2023.

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    The bank’s analysts said they saw higher net interest income and fee income, while the cost of risk improved slightly.

    “We now project recurring net income of BRL 29.6 billion for 2022 and BRL 31.8 billion for 2023, with ROE of 19.5% and 18.9%, respectively,” they said.

    Bradesco BBI’s forecast is 15.6% above the Bloomberg consensus for 2022 and is 17.4% higher than the consensus for 2023, in addition to being 3.9% above the midpoint of the BRL 27 guidance range. billion to 30 billion.

    However, with the second quarter’s strong results, the trend that is the median consensus also moves up, as analysts adjust forecasts.

    Banco do Brasil recorded adjusted net income of BRL 7.8 billion in the second quarter of 2022, up 54.8% and above the BRL 6.2 billion gains expected by the market.


    O Money Times publishes informative articles of a journalistic nature. This publication does not constitute an investment recommendation.

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    Source: Moneytimes

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