3 reasons to buy shares, according to Itaú BBA – Money Times

BB Security
BB Seguridade was highly recommended by Itaú BBA (Image: Renan Dantas/Money Times)

O Itaú BBA hit the hammer and now has an outperform recommendation (above the market average) for the shares of BB Security (BBSE3), the insurance arm of the Bank of Brazil (BAAS3).

The target price is BRL 32, a potential increase of 25% compared to the last closing.

Here are three reasons BBA lists to be bullish on paper.

BB Seguridade will profit more

For the Itaú BBAO BB Security profit more, with annual growth of 40% to 50%, driven by easy claims compensation, higher premium prices and better financial results.

“The momentum should remain for double-digit profit growth in 2023,” he predicts.

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By analysts’ calculations, revenue profitability should increase by 39%, to R$5.5 billion, with premiums expanding by 15%, driven mainly by the rural segment.

“The loss ratio should act as a wind in favor of operating profits from the second half of the year and should remain at least next year, with improvements in rural areas and life”, he states.

In addition, the BBA raised net income for 2023 by 17%. Analysts also claim that, historically, multiples expand according to profitability.

“This can be justified by the greater value that can be created between now and the contract with the Bank of Brazil ending in the next decade”, he justifies.

Bank of Brazil

O Itaú BBA also has a great preference for Bank of Brazil for the short and medium term.

“Among the big banks, it offers strong credit quality, capital ratios and has been continuously improving efficiency”, he argues.

For BBA analysts, BB is still cheap in terms of P/PL.

“Vemo he being negotiated with one evaluation attractive and next in your larger discount historic for others big ones banks Brazilians. Since what O we add to our portfolio, your performance has been much positive, sustained per Good results,” he says.

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Agribusiness and liquidity

BB Seguridade is the favorite company of the Itaú BBA for the agribusiness. This is because the insurance arm has an important role in the segment.

In addition, BBA recalls that the share has high liquidity, which facilitates the negotiation of buying and selling securities.

With the recommendation, the share of BB Seguridade rose 1.16%, to R$ 25.21, while the Ibovespa operated stable.

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Disclaimer

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

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About Yadunandan Singh

Born in 1992, Yadunandan approaches the world of video games thanks to two sacred monsters like Diablo and above all Sonic, strictly in the Sega Saturn version. Ranging between consoles and PCs, he is particularly fond of platform titles and RPGs, not disdaining all other genres and moving in the constant search for the perfect balance between narration and interactivity.

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