November 7, 2024
Top 10 Stock Banco do Brasil Hold 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 November 07, 2024 in the market index Renewables Users because of its high performance in at least one of the Obermatt investment strategies. Only the Obermatt Value Rank exhibits above-average performance, which means that the stock is seen as critical by the professional community and other financial facts are below average, conveying mixed investment signals. Based on the Obermatt 360° View of 31 (31% performer), Obermatt assesses an overall hold recommendation for Banco do Brasil on November 07, 2024.
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 Hold
| 360 METRICS | November 7, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 100 |
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| GROWTH | ||||||||
| GROWTH | 33 |
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| SAFETY | ||||||||
| SAFETY | 3 |
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| SENTIMENT | ||||||||
| SENTIMENT | 41 |
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| 360° VIEW | ||||||||
| 360° VIEW | 31 |
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ANALYSIS: With an Obermatt 360° View of 31 (better than 31% compared with alternatives), overall professional sentiment and financial characteristics for the stock Banco do Brasil are below the industry average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for Banco do Brasil. Only 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 that the stock price is lower than for 100% of alternative stocks in the same industry. All other consolidated ranks are below average. The consolidated Growth Rank has a low rank of 33, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. The consolidated Safety Rank has a riskier rank of 3, meaning the company has a riskier financing structure than 97% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, professionals are more pessimistic about the stock than for 59% of alternative investment opportunities, reflected in the consolidated Sentiment Rank of 41. ...read more
RECOMMENDATION: With a consolidated 360° View of 31, Banco do Brasil is worse than 69% of all alternative stock investment opportunities based on the Obermatt Method. Only one of the consolidated Obermatt Ranks exhibits above-average performance, namely the Value Rank at a level of 100. All other ranks are below average, so proceed with caution. The company has below-average growth expectations (Growth Rank of 33), a riskier financing structure than the competition (Safety Rank of 3), and the market sentiment in the professional investor community ranking at (Sentiment Rank of 41) is negative. This combination is sensitive to a crisis, because high debt levels (low safety) require growth to finance the debt burden. It’s no wonder that the investor community indicators are skeptical (low sentiment). Good value is sometimes an indication that the company's future is challenging. The below-par growth performance may be the reason for this assessment. We recommend evaluating whether the future of Banco do Brasil is as challenging as the low price of the stock suggests. Since the professional community is pessimistic, you might need to worry about the future of Banco do Brasil. Only invest if you have solid reasons to believe that the low growth is temporary and the current market sentiment is an overreaction, possibly due to reputational issues in the past. ...read more
Sentiment Strategy: Professional Market Sentiment for Banco do Brasil only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 41 (better than 41% compared with alternatives), overall professional sentiment and engagement for the stock Banco do Brasil is below industry 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 81 (better than 81% 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 64 which means that currently, professional investors hold more stock in this company than in 64% of alternative investment opportunities. But Analyst Opinions Change has a rank of 30, 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 4, 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 96% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 41 (less encouraging than 59% compared with investment alternatives), Banco do Brasil has a reputation among professional investors that is 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 2024, 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 95 which means that the stock price compared with what market professionals expect for future sales is lower than for 95% 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 100% 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 low
ANALYSIS: With an Obermatt Growth Rank of 33 (better than 33% compared with alternatives), Banco do Brasil shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for Banco do Brasil. Only Capital Growth has a good rank of 65, which means that currently professionals expect the company to grow its invested capital more than 36% of its competitors. The other three indicators are pointing South: Sales Growth has a rank of 23 which means that currently professionals expect the company to grow less than 77% of its competitors. Profit Growth with a rank of 36 and Stock Returns with a rank of 39 are also low (below 61% of alternative investments). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 33, is a hold recommendation for growth and momentum investors. The good news from the invested capital side is surprising. A company with disappointing revenues, profits, and disappointed shareholders typically doesn't invest above average. Overall, the growth momentum for Banco do Brasil is thus negative. As it is intriguing to see that company executives are optimistic about their investment policy, it is worthwhile looking into the details of the capital investment projects. They may indicate future growth and profits and thus if accompanied by a good value, a sign of good timing to invest in the stock. ...read more
Safety Strategy: Banco do Brasil Debt Financing Safety risky
| SAFETY METRICS | November 7, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 2 |
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| REFINANCING | ||||||||
| REFINANCING | 37 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 31 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 3 |
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ANALYSIS: With an Obermatt Safety Rank of 3 (better than 3% compared with alternatives), the company Banco do Brasil has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly 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 all three metrics below average for Banco do Brasil. Liquidity is at 31, meaning that the company generates less profit to service its debt than 69% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 2, meaning the company has an above-average debt-to-equity ratio. It has more debt than 98% of its competitors. Finally, Refinancing is at a rank of 37 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 63% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 3 (worse than 97% compared with alternatives), Banco do Brasil has a financing structure that is significantly riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing.
Combined financial peformance: Banco do Brasil Below-Average Financial Performance
| COMBINED PERFORMANCE | November 7, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 100 |
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| GROWTH | ||||||||
| GROWTH | 33 |
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| SAFETY | ||||||||
| SAFETY | 31 |
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| COMBINED | ||||||||
| COMBINED | 37 |
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ANALYSIS: With an Obermatt Combined Rank of 37 (worse than 63% compared with investment alternatives), Banco do Brasil (Diversified Banks, Brazil) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Banco do Brasil are a good value (attractively priced) with a consolidated Value Rank of 100 (better than 100% of alternatives) but show below-average growth (Growth Rank of 33), and are riskily financed (Safety Rank of 3), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 37, is a hold recommendation based on Banco do Brasil's financial characteristics. As the company Banco do Brasil's key financial metrics exhibit good value (Obermatt Value Rank of 100) but low growth (Obermatt Growth Rank of 33) and risky financing practices (Obermatt Safety Rank of 3), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 100% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. ...read more
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