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Itau Unibanco Holding SA ADR ITUB

Morningstar Rating
$6.93 −0.01 (0.09%)
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Company Report

Itau: Increasing our Valuation to $6.30 From $5.90 on Higher Loan Growth and Lower Credit Costs

We are increasing our fair value estimate for Itau to $6.30 per ADR share from $5.90. Around $0.20 of the increase is from higher medium-term loan growth projections. Brazil will likely achieve a soft landing from the elevated inflation in 2022 and early 2023. Inflation has fallen into the medium to low-single digits, allowing the Brazilian central bank to begin cutting interest rates. Brazil's benchmark reduced to 11.25% from a high of 13.75% last year. With inflation remaining relatively tame in Brazil, further interest rate cuts are expected. The combination of falling interest rates and a surprisingly resilient labor market has raised prospects for better loan growth in Brazil, with Itau well-positioned to take advantage, particularly considering the poor performance of some of its peers.

Price vs Fair Value

ITUB is trading at a 7% premium.
Price
$6.74
Fair Value
$1.50
Uncertainty
High
1-Star Price
$5.89
5-Star Price
$8.83
Economic Moat
Zlgh
Capital Allocation
Jdtwlbw

Bulls Say, Bears Say

Bulls

Inflation in Brazil has fallen to the midsingle digits from a peak of over 12% in 2022, creating potential for a relatively soft landing in Brazil.

Bears

Itaú is seeing greater competition from disruptive fintech firms, which are benefiting from central bank led initiatives.

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News

Trading Information

Previous Close Price
$6.94
Day Range
$6.896.98
52-Week Range
$4.547.27
Bid/Ask
$6.79 / $7.09
Market Cap
$67.75 Bil
Volume/Avg
8.8 Mil / 16.6 Mil

Key Statistics

Price/Earnings (Normalized)
9.68
Price/Sales
2.31
Dividend Yield (Trailing)
3.39%
Dividend Yield (Forward)
3.39%
Total Yield
3.39%

Company Profile

Itaú Unibanco is the largest privately held bank in Brazil, the result of the 2008 merger between Banco Itaú and Unibanco. In addition to Brazil, the bank has significant operations in Chile, Colombia, Argentina, Uruguay, and Paraguay. Itaú's commercial and consumer loans account for 33% and 44%% of the bank’s total loans, respectively, while foreign loans account for 23% of its portfolio. The bank also operates the fifth-largest insurer in Brazil and is the second-largest asset manager in the country, giving it broad reach over the Brazilian financial system.
Sector
Financial Services
Industry
Banks - Regional
Stock Style Box
Large Core
Total Number of Employees
95,702

Competitors

Valuation

Metric
ITUB
BSAC
BBD
Price/Earnings (Normalized)
9.6813.7810.37
Price/Book Value
1.731.590.89
Price/Sales
2.314.111.55
Price/Cash Flow
4.0913.092.44
Price/Earnings
ITUB
BSAC
BBD

Financial Strength

Metric
ITUB
BSAC
BBD
Quick Ratio
Current Ratio
Interest Coverage
Quick Ratio
No chart available

Profitability

Metric
ITUB
BSAC
BBD
Return on Assets (Normalized)
1.44%0.83%0.73%
Return on Equity (Normalized)
19.76%13.09%8.34%
Return on Invested Capital (Normalized)
Return on Assets
ITUB
BSAC
BBD
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Banks - Regional Industry Comparables

Ticker
Name
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
BNPQY
BNP Paribas ADRHjhdqrnHfqs$81.5 Bil
USB
U.S. BancorpZpvnqryyzFjkz$69.7 Bil
ISNPY
Intesa Sanpaolo ADRSbmsslskwPtr$66.4 Bil
PNC
PNC Financial Services Group IncRgtlhsgZwrzhmr$64.3 Bil
TFC
Truist Financial CorpWtjrvhygGnyfzk$52.0 Bil
MFG
Mizuho Financial Group Inc ADRHkgkwrfmTtss$50.1 Bil
LYG
Lloyds Banking Group PLC ADRVdqdmccsxSglxdmn$41.6 Bil
NWG
NatWest Group PLC ADRSsnTjqx$29.3 Bil
BBD
Bank Bradesco SA ADRCywdtgcrPnqk$28.7 Bil

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