Will Banco do Brasil’s Relief Continue? XP Sees a Slow Recovery Path for BBAS3 in 2025
- Is Banco do Brasil’s Recent Rally Sustainable?
- What’s Driving XP’s Pessimism?
- How Does BBAS3 Stack Up Against Peers?
- Could Government Support Change the Game?
- FAQ: Your BBAS3 Questions Answered
Banco do Brasil (BBAS3) has shown signs of relief in recent months, but analysts at XP Investimentos remain cautious, projecting a sluggish recovery trajectory for the stock. While market Optimism has buoyed shares, structural challenges and macroeconomic headwinds could delay a full rebound. This article dives into the key factors influencing BBAS3’s performance, historical context, and expert insights—without sugarcoating the hurdles ahead. ---
Is Banco do Brasil’s Recent Rally Sustainable?
Banco do Brasil’s stock (BBAS3) has clawed back some losses in 2025, with a 12% uptick since Q1. But let’s not pop the champagne yet. XP’s latest report flags persistent risks: high-interest rates, Brazil’s fiscal uncertainty, and slower-than-expected loan growth. "The relief is real, but it’s fragile," notes a BTCC market strategist. Historical data from TradingView shows BBAS3 still trails its 2024 peak by 18%, suggesting investors are wary of overcommitting.
What’s Driving XP’s Pessimism?
XP’s team isn’t just being contrarian—they’ve crunched the numbers. Their September 2025 analysis highlights three red flags: 1. Credit Quality: Delinquency rates for small-business loans hit 6.3% in August, a 2-year high. 2. Margin Pressure: Net interest margins squeezed to 4.1% (down from 4.8% in 2024). 3. Political Wildcards: Proposed banking reforms could dent profitability. "Banco do Brasil needs a clean macro tailwind to accelerate," argues XP’s lead banking analyst. Until then, expect choppy trading.
How Does BBAS3 Stack Up Against Peers?
It’s a mixed bag. While Itaú (ITUB4) and Bradesco (BBDC4) have outperformed BBAS3 year-to-date, Banco do Brasil’s state-backed liquidity gives it a unique cushion. Data from CoinMarketCap (for comparative analysis) shows BBAS3’s volatility is 23% higher than Itaú’s—a double-edged sword for traders. "BB’s upside potential is there, but so’s the risk," admits a BTCC trader. "You’re betting on Brazil’s economy as much as the bank."
Could Government Support Change the Game?
Maybe. The Lula administration’s infrastructure push has indirectly helped BB’s project-finance division. But relying on political goodwill is like building a house on sand—just ask anyone who traded BBAS3 during the 2023 pension reform chaos. XP’s view? "Policy boosts are temporary. Fundamentals rule long-term."
FAQ: Your BBAS3 Questions Answered
Why is XP more bearish than other brokers?
XP’s models weigh credit risk more heavily—a lesson learned from Brazil’s 2024 banking scare. Others focus on BB’s dividend yield (currently 8.2%).
Should I buy BBAS3 now?
This article does not constitute investment advice. That said, BTCC’s weekly sentiment index shows retail traders are net long—but hedge funds are hedging.
