August 17, 2023
Top 10 Stock Banco do Brasil Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Banco do Brasil – Top 10 Stock in Renewable Energy Use Leaders
Banco do Brasil is listed as a top 10 stock on August 17, 2023 in the market index Renewables Users because of its high performance in at least one of the Obermatt investment strategies. While half the consolidated Obermatt Ranks are above-average, investor sentiment is below average and thus a signal for caution. Based on the Obermatt 360° View of 74 (high 74% performer), Obermatt assesses an overall buy recommendation for Banco do Brasil on August 17, 2023.
Snapshot: Obermatt Ranks
| Country | Brazil |
| Industry | Diversified Banks |
| Index | BOVESPA, Independent Boards Growth Markets, Renewables Users |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Banco do Brasil Buy
| 360 METRICS | August 17, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 100 |
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| GROWTH | ||||||||
| GROWTH | 83 |
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| SAFETY | ||||||||
| SAFETY | 34 |
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| SENTIMENT | ||||||||
| SENTIMENT | 23 |
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| 360° VIEW | ||||||||
| 360° VIEW | 74 |
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ANALYSIS: With an Obermatt 360° View of 74 (better than 74% compared with alternatives), overall professional sentiment and financial characteristics for the stock Banco do Brasil are above average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Banco do Brasil. The consolidated Value Rank has an attractive rank of 100, which means that the share price of Banco do Brasil is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 100% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 83, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 23. Professional investors are more confident in 77% other stocks. Worryingly, the company has risky financing, with a Safety rank of 34. This means 66% of comparable companies have a safer financing structure than Banco do Brasil. ...read more
RECOMMENDATION: With a consolidated 360° View of 74, Banco do Brasil is better positioned than 74% of all alternative stock investment opportunities based on the Obermatt Method. Even though half of the consolidated Obermatt Ranks are above-average, namely the Value Rank at 100 and the Growth Rank above-average at 83, the picture is still mixed. The professional investor community is skeptical, with the Sentiment Rank below-average at 23. In addition, the company financing structure is on the riskier side (Safety Rank of 34). Since the company is good value and the share price low, it should attract investors, yet professionals are skeptical. One may be tempted by above-average growth, but that could also change quickly, as past performance is not a good indicator of future performance. Since the financing structure is on the risky side, investors should be careful with this decision and conduct further research if they are serious about investing in this company. ...read more
Sentiment Strategy: Professional Market Sentiment for Banco do Brasil negative
ANALYSIS: With an Obermatt Sentiment Rank of 23 (better than 23% compared with alternatives), overall professional sentiment and engagement for the stock Banco do Brasil is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the indicators below and the other half above average for Banco do Brasil. Analyst Opinions are at a rank of 62 (better than 62% of alternative investments). Currently, stock research analysts tend to recommend a stock investment in the company. There are also many institutional investors invested in the stock, represented by a Professional Investors rank of 61 which means that currently, professional investors hold more stock in this company than in 61% of alternative investment opportunities. But Analyst Opinions Change has a rank of 41, which means that stock research experts are changing their opinions for the worse in recommending investing in the company. In other words, they are getting more critical of investments in Banco do Brasil. Furthermore, Market Pulse has a rank of 2, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 98% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 23 (less encouraging than 77% compared with investment alternatives), Banco do Brasil has a reputation among professional investors that is far below that of its competitors. Three below-market sentiment indicators are a sign of caution, even if the stock has significantly appreciated. If analysts change their opinions, the stock may become too expensive. If the price is on the way down, the trend may continue. This may be a stock with a good reputation and history, but it may have reached its breaking point by now. Investors should look at the Value Ranks as well. If they indicate trouble, it may be around the corner. ...read more
Value Strategy: Banco do Brasil Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 100 (better than 100% compared with alternatives) for 2023, Banco do Brasil shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Banco do Brasil. Price-to-Sales is 97 which means that the stock price compared with what market professionals expect for future sales is lower than for 97% of comparable companies, indicating a good value for Banco do Brasil's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 97% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 89. Compared with other companies in the same industry, dividend yields of Banco do Brasil are expected to be higher than for 100% of all competitors (a Dividend Yield rank of 100). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 100, is a buy recommendation based on Banco do Brasil's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in Banco do Brasil based on its detailed value metrics.
Growth Strategy: Banco do Brasil Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 83 (better than 83% compared with alternatives) for 2023, Banco do Brasil shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Banco do Brasil. Profit Growth has a rank of 79 which means that currently professionals expect the company to grow its profits more than 79% of its competitors. The same is valid for capital growth and stock returns. Capital Growth has a rank of 97, and Stock Returns has a rank of 73 which means that the stock returns have recently been above 73% of alternative investments. Only revenue growth is low with a Sales Growth has a rank of 12 (88% of its competitors are better). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 83, is a buy recommendation for growth and momentum investors. The many positive growth indicators indicate a positive growth momentum with only low revenue growth. That can also be attributed to divestments or the sale of unprofitable businesses. If that is the reason, overall growth is well on track to making this stock attractive for growth investors. ...read more
Safety Strategy: Banco do Brasil Debt Financing Safety below-average
| SAFETY METRICS | August 17, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 3 |
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| REFINANCING | ||||||||
| REFINANCING | 43 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 73 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 34 |
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ANALYSIS: With an Obermatt Safety Rank of 34 (better than 34% compared with alternatives), the company Banco do Brasil has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Banco do Brasil is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Banco do Brasil. Liquidity is at 73, meaning the company generates more profit to service its debt than 73% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 43, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 57% of its competitors. Leverage is also high at a rank of 3, which means that the company has an above-average debt-to-equity ratio. It has more debt than 97% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 34 (worse than 66% compared with alternatives), Banco do Brasil has a financing structure that is riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. ...read more
Combined financial peformance: Banco do Brasil Top Financial Performance
| COMBINED PERFORMANCE | August 17, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 100 |
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| GROWTH | ||||||||
| GROWTH | 83 |
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| SAFETY | ||||||||
| SAFETY | 73 |
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| COMBINED | ||||||||
| COMBINED | 96 |
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ANALYSIS: With an Obermatt Combined Rank of 96 (better than 96% compared with investment alternatives), Banco do Brasil (Diversified Banks, Brazil) shares have much better financial characteristics than comparable stocks. Shares of Banco do Brasil are a good value (attractively priced) with a consolidated Value Rank of 100 (better than 100% of alternatives), show above-average growth (Growth Rank of 83) but are riskily financed (Safety Rank of 34), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 96, is a strong buy recommendation based on Banco do Brasil's financial characteristics. As the company Banco do Brasil's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 100) and above-average growth (Obermatt Growth Rank of 83), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 34) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
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