Summary
- Banco do Brasil is a HOLD: statistically cheap, but pressured by rising rural credit delinquency and weak earnings outlook through early 2026.
- Short-term prospects remain challenging, with elevated provisions, compressed profits, and a restrained dividend payout ratio near 30%, yielding about 5% net.
- Current valuation implies investors are paying almost exclusively for BDORY’s profitable subsidiaries, with little value assig…
Summary
- Banco do Brasil is a HOLD: statistically cheap, but pressured by rising rural credit delinquency and weak earnings outlook through early 2026.
- Short-term prospects remain challenging, with elevated provisions, compressed profits, and a restrained dividend payout ratio near 30%, yielding about 5% net.
- Current valuation implies investors are paying almost exclusively for BDORY’s profitable subsidiaries, with little value assigned to potential credit recovery.
- Recovery hinges on rural delinquency stabilizing and evidence that tighter credit standards improve results, likely not visible before mid-2026.
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Investment Thesis
Being very straightforward, in my view, Banco do Brasil (BDORY) fits today into a classic HOLD case. It is statistically cheap historically interesting in moments of stress, but still tied to a credit
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