ITUB

Rating buyAI Memo

Itau Unibanco Pfd n-vtg Pfd

As of 2025-09-27/Confidence medium

Open ticker Back to Memos

Data freshness

AI Memo

As of 2025-09-27 • Model: RankAlpha Sentiment AI

Decision Panel

Action, confidence, horizon, and decision blockers at a glance.

Action

buy

Confidence

medium

Horizon

—

Key catalyst

Q3 2025 earnings

Expected move: -4%

Biggest risk

A sharper domestic slowdown, higher NPLs, or regulatory limits on distributions force multiple compression and push the ADR toward the bear target.

Invalidation

Break below $6 or thesis failure.

What would change my mind?

Above-consensus NII and contained provisions drive margin expansion and re-rating toward the bull target; capital returns or sustained FX stability would accelerate upside.

Research note

Recommendation

buy

Confidence

medium

As of

2025-09-27

Base target

p=60%

Bull target

p=20%

Bear target

p=20%

Key bullets

Fast scan of bull, bear, and watch items

BullKey bullets

Capital return / dividend surprise
Brazil rate/macro path
Above-consensus NII and contained provisions drive margin expansion and re-rating toward the bull target; capital returns or sustained FX stability would accelerate upside.

BearKey bullets

BRL depreciation or FX shock reducing USD ADR returns
Competitive pressure compressing fees/margins
Execution risk on cost and credit controls

WatchKey bullets

Q3 2025 earnings

Summary

High-level snapshot

Recommendation

buy

Model confidence

medium

Timeframe

Asset

Equity

Trigger

Base case: $8 (p=60%)

Bull/Bear spread: +15% / -22%

Vs latest close: Bull +15% · Base -4% · Bear -22%

Scenario probabilities

Bull Target: $9 (p=20%)Base Target: $8 (p=60%)Bear Target: $6 (p=20%)

Commentary

Market tone is cautiously constructive: investors acknowledge rate-driven NII support but remain watchful on provisions and FX [#YF2025-09-27]. Near-term focus is on Q3 results and Brazil policy signals as primary re-rating catalysts [#BR-Macro-2025]. Headlines on dividends or provisioning tend to drive short-term ADR moves [#IRQ3-2025].

As of 2025-09-27 • Updated bi-weekly / post-earningsSource: Internal modelMethodology

Analyst Summary

Thesis highlights from the latest analysis

Bull Case

Above-consensus NII and contained provisions drive margin expansion and re-rating toward the bull target; capital returns or sustained FX stability would accelerate upside.

Bear Case

A sharper domestic slowdown, higher NPLs, or regulatory limits on distributions force multiple compression and push the ADR toward the bear target.

Drivers

Scannable catalysts and supporting factors

Capital return / dividend surprise
Brazil rate/macro path

Scenarios

Bull Target (Scenario probability)

$9 / p=20% prob

Base Target (Scenario probability)

$8 / p=60% prob

Bear Target (Scenario probability)

$6 / p=20% prob

Price $8 as of 2026-05-29

Nearest Scenario: Base (∆ 4%)

Targets vs latest close: Bull +15% · Base -4% · Bear -22%

Sentiment & Exposure

Sentiment unavailable: insufficient coverage

Events

Other notable items detected

EVENT
Q3 2025 earnings
Quarterly results and management commentary on NII, provisioning and guidance; a surprise on provisions or NII typically moves the ADR decisively [#YF2025-09-27].
Prob 65.00% • Move 5.00% • Priced-in 40.00%
EVENT
Credit stress from slowdown
Material deterioration in consumer or corporate credit raises provisions and compresses earnings and valuation [#BR-Macro-2025].
Prob 25.00% • Move -12.00% • Priced-in 15.00%

Short-term Catalysts

Next few weeks

Capital return / dividend surprise
TBD
Regulatory or management decisions on dividends/buybacks can re-rate the ADR quickly if capital distributions deviate from expectations [#IRQ3-2025].
Prob 30% • Move 6% • Priced-in 10%

Long-term Catalysts

Months to a year

Brazil rate/macro path
TBD
Selic and growth trends drive net interest margin and loan demand; persistent high rates support NII, early cuts compress it [#BR-Macro-2025].
Prob 40% • Move 8% • Priced-in 20%

Risks

BRL depreciation or FX shock reducing USD ADR returns
Competitive pressure compressing fees/margins
Execution risk on cost and credit controls
Regulatory constraints on capital distribution
Worsening domestic credit cycle and higher provisions

Peers

Symbol	Summary
BBD	Banco Bradesco (ADR) — large domestic retail/commercial franchise; similar sensitivity to Brazil rates and consumer credit.
SAN	Banco Santander (global) — diversified retail bank with Latin America exposure; cross-check for fee and capital dynamics.

Sources

Internal and external references used in this analysis

Model source: RankAlpha Sentiment AI
Analysis date: 2025-09-27

AI Stock Memo: ITUB - Itau Unibanco Pfd n-vtg Pfd - RankAlpha