BBAS3, BBDC4, ITUB4, and SANB11: Safra Updates Bank Stocks and Picks a New Favorite for 2026 – Here’s the Potential
- Why Are Brazilian Bank Stocks Still a Safe Bet in 2026?
- Bradesco: The New Darling of Analysts
- Itaú: Worth Every Penny?
- Banco do Brasil: A Cautious Neutral
- Santander: Proceed with Caution
- FAQs: Your Burning Questions Answered
Brazilian bank stocks remain a cornerstone of the local market, with Itaú Unibanco (ITUB4), Bradesco (BBDC4), Banco do Brasil (BBAS3), and Santander Brasil (SANB11) leading the charge. Safra’s latest analysis shifts its top pick to Bradesco, citing improved efficiency and growth potential, while Itaú retains strong fundamentals. Despite macroeconomic headwinds, these banks show resilience, with detailed price targets and upside potential outlined below. Data sourced from TradingView and company filings.
Why Are Brazilian Bank Stocks Still a Safe Bet in 2026?
Brazil’s banking sector has long been a haven for investors, combining profitability with resilience. Even amid global volatility—like the lingering effects of the Iran conflict—these stocks have posted double-digit gains this year. Safra’s analysts, Daniel Vaz, Maria Luisa Guedes, and Rafael Nobre, recently updated their projections, tweaking recommendations and spotlighting Bradesco as their new top pick. "We see higher quality improvement potential here," they note, though Itaú’s robust ROE expansion keeps it in close contention.
Bradesco: The New Darling of Analysts
Two years into its restructuring plan, Bradesco is finally winning over skeptics. Cost-cutting measures—like a 25% reduction in physical branches—and disciplined salary growth (just 4.4% in 2025) have paid off. Safra raised its loan portfolio growth forecast to 9.5% annually, driven by SME lending. However, higher risk-cost assumptions led to a 5% bump in 2026 provision estimates. "The roadmap to efficiency is clear," says the BTCC team, "and 2027 should bring even sharper clarity."
| Bank | Recommendation | Target Price | Upside |
|---|---|---|---|
| Bradesco (BBDC4) | Buy | R$ 26 | 30% |
| Itaú (ITUB4) | Buy | R$ 55 | 26% |
| Banco do Brasil (BBAS3) | Neutral | R$ 28 | 8.3% |
| Santander (SANB11) | Neutral | R$ 41 | 28% |
Itaú: Worth Every Penny?
With a 52% surge over the past 12 months, some worry Itaú’s stock is overpriced. Not so, argues Safra. The bank’s ROE growth—fueled by net interest income and operational efficiency—justifies its premium. Adjusted net income projections for 2026-27 stand at R$51.5B and R$56.1B, slightly above prior estimates but below consensus. "Opex discipline will drive gains for years," the report emphasizes, though NII growth may slow.
Banco do Brasil: A Cautious Neutral
BB’s agribusiness woes since Q1 2025 have been a drag, but management insists recovery is underway. Safra trimmed provision estimates (-4% for 2026) but kept them above the bank’s guidance due to backloaded risk-cost improvements. Legal expenses pushed opex higher, resulting in neutral ratings. "Less bad isn’t quite good enough," quips one analyst.
Santander: Proceed with Caution
Santander’s risk-averse loan strategy has reduced credit dependency, but ROE recovery hinges on opex control. Management targets 20% ROE by 2028, but Safra warns: "Any opex acceleration could derail profits." Revised net income estimates for 2026-27 are 6% lower, with cost-of-risk up 20bps year-over-year.
FAQs: Your Burning Questions Answered
Which Brazilian bank has the highest upside in 2026?
Bradesco (BBDC4) tops Safra’s list with 30% potential, thanks to cost-cutting and loan growth.
Is Itaú overvalued after its 52% rally?
Safra argues no—its ROE expansion and opex efficiency justify current levels.
Why is Banco do Brasil rated Neutral?
Agribusiness risks and elevated provisions offset recovery efforts, capping near-term upside.
