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Itau Unibanco Banco Holding Sa (ITUB)
NYSE:ITUB
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Itau Unibanco
(NYSE:ITUB)81Outperform
Positive Factors
Capital Distribution
The management announced additional capital distribution of R$18bn, which includes R$15bn in dividends and R$3bn for share buyback.
Financial Performance
The company delivered a net income growth of 16% and a return on equity of 22.2%.
Negative Factors
Market Net Interest Income
Market net interest income fell by 14% quarter-on-quarter, negatively impacted by lower trading gains and the widening of the yield curve.
Itau Unibanco (ITUB) vs. S&P 500 (SPY)
Market Cap
$47.35B
Dividend Yield3.1%
Average Volume (3M)25.11M
Price to Earnings (P/E)7.0
Beta (1Y)0.75
Revenue Growth1.25%
EPS Growth20.03%
CountryUS
Employees99,913
SectorFinancial
Sector Strength93
IndustryBanking
Share Statistics
EPS (TTM)0.78
Shares Outstanding4,845,845,000
10 Day Avg. Volume20,244,161
30 Day Avg. Volume25,109,674
Financial Highlights & Ratios
PEG Ratio0.46
Price to Book (P/B)N/A
Price to Sales (P/S)2.02
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$6.70Price Target Upside22.49% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
Itau Unibanco Business Overview & Revenue Model
Company DescriptionItaú Unibanco (ITUB) is a prominent financial services company based in Brazil, recognized as one of the largest banking institutions in Latin America. The company operates in various sectors, including commercial banking, investment banking, asset management, and insurance services. It offers a wide range of financial products and services to individuals, small and medium-sized enterprises (SMEs), and large corporations, including loans, credit cards, investment products, and insurance policies.
How the Company Makes MoneyItaú Unibanco generates revenue primarily through its diverse financial services portfolio. The company's core revenue streams include interest income from loans and credit products provided to personal and corporate clients, fees from managing investment funds and asset management services, and commissions from insurance policies. Additionally, Itaú Unibanco benefits from transactional fees associated with its extensive network of ATMs and digital banking services. Strategic partnerships and collaborations with other financial institutions and fintech companies also play a role in enhancing its service offerings and expanding its customer base, contributing to its overall earnings.
Itau Unibanco Financial Statement Overview
Summary
Itau Unibanco demonstrates strong financial health with robust profitability and revenue growth, a stable balance sheet with manageable leverage, and solid cash flow generation, despite some potential cash flow volatility.Income Statement
Itau Unibanco shows strong gross profit and net profit margins in the TTM period, indicating effective cost management and profitability. The revenue growth has been consistent, though it experienced a slight dip in absolute revenue in the past. The EBIT and EBITDA margins are solid, reflecting efficient operational performance. Overall, the bank is demonstrating robust income generation capabilities.85
Very Positive
Balance Sheet
The balance sheet is stable with a reasonable debt-to-equity ratio, suggesting manageable leverage levels for a bank. The return on equity is healthy, indicating effective utilization of shareholder funds. Equity ratio is decent, showing a solid capital base. However, there is a high level of total liabilities, which is typical for the banking industry but still a potential risk factor.80
Positive
Cash Flow
The operating cash flow to net income ratio is strong, indicating good cash generation relative to net income. Free cash flow growth has been somewhat volatile, but remains positive. The free cash flow to net income ratio is healthy, suggesting that the bank efficiently converts its earnings into cash. However, the variability in investing and financing cash flows suggests some potential for fluctuations in future cash flow stability.78
Positive
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 243.57B | 124.53B | 138.60B | 121.83B | 94.68B | 112.12B | Gross Profit |
| 291.62B | 344.76B | 138.60B | 121.83B | 94.68B | 112.12B | EBIT |
| 46.96B | 51.51B | 175.01B | 40.61B | 9.06B | 30.54B | EBITDA |
| 11.88B | 44.43B | 0.00 | 45.30B | 8.89B | 33.49B | Net Income Common Stockholders |
| 39.02B | 33.10B | 29.21B | 26.76B | 15.06B | 27.11B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 40.58B | 40.58B | 331.77B | 324.67B | 301.91B | 232.86B | Total Assets |
| 2.54T | 2.54T | 2.32T | 2.07T | 2.02T | 1.64T | Total Debt |
| 451.83B | 451.83B | 427.96B | 321.22B | 299.56B | 279.31B | Net Debt |
| 223.42B | 223.42B | 217.24B | 102.17B | 107.59B | 123.11B | Total Liabilities |
| 2.34T | 2.34T | 2.15T | 1.90T | 1.86T | 1.49T | Stockholders Equity |
| 190.18B | 190.18B | 167.95B | 152.86B | 142.99B | 136.93B |
| Cash Flow | Free Cash Flow | ||||
| 86.08B | 68.30B | 121.47B | 51.02B | 54.18B | 30.91B | Operating Cash Flow |
| 94.79B | 77.49B | 129.97B | 60.11B | 59.49B | 35.22B | Investing Cash Flow |
| -104.21B | -31.23B | -73.60B | -4.84B | 753.00M | -38.72B | Financing Cash Flow |
| 62.22B | 57.47B | -31.71B | -31.46B | 288.39B | 22.33B |
Itau Unibanco Technical Analysis
Negative
5.47
Price Trends
5.29
Positive
5.46
Positive
5.70
Negative
Market Momentum
0.05
Positive
45.38
Neutral
17.70
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ITUB, the sentiment is Negative. The current price of 5.47 is below the 20-day moving average (MA) of 5.67, above the 50-day MA of 5.29, and below the 200-day MA of 5.70, indicating a neutral trend. The MACD of 0.05 indicates Positive momentum. The RSI at 45.38 is Neutral, neither overbought nor oversold. The STOCH value of 17.70 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ITUB.
Itau Unibanco Risk Analysis
Itau Unibanco disclosed 50 risk factors in its most recent earnings report. Itau Unibanco reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Itau Unibanco Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $47.35B | 7.03 | 19.38% | 3.10% | 1.25% | 20.03% | |
73 Outperform | $136.34B | 12.17 | 6.08% | 2.86% | 8.20% | 49.26% | |
72 Outperform | $324.49B | 13.28 | 9.18% | 2.19% | 13.06% | 4.94% | |
70 Outperform | $18.99B | 6.47 | 8.70% | 1.59% | -8.06% | 3.79% | |
66 Neutral | $15.13B | ― | 11.19% | 5.06% | -3.94% | ― | |
64 Neutral | $14.34B | 10.61 | 9.28% | 4.07% | 18.04% | -9.54% |
* Financial Sector Average
Performance Comparison
ITUB
Itau Unibanco
5.47
-0.96
-14.93%
BBD
Banco Bradesco SA
1.97
-0.67
-25.38%
BSBR
Banco Santander Brasil
4.39
-1.06
-19.45%
BAC
Bank of America
42.67
7.89
22.69%
C
Citigroup
72.35
16.97
30.64%
Itau Unibanco Earnings Call Summary
Earnings Call Date: Feb 5, 2025 | % Change Since: -3.87% | Next Earnings Date: May 12, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial performance and growth across various segments, with notable achievements in profitability and ESG initiatives. However, it also acknowledged challenges in loan migration, competition, and the impact of FX rates on loan growth.Highlights
Record Earnings and Profitability
The bank closed 2024 with an annual profit of BRL41.4 billion, showing a strong growth of 18.2% year-over-year. The consolidated ROE reached 22.1% and 23.4% in Brazil.
Loan Portfolio Expansion
The loan portfolio grew to BRL1.359 trillion, a 15.5% increase over December 2023. This growth was achieved with improved credit quality, reducing long-term NPL by 0.5 percentage points compared to December 2023.
Strong Performance in Financial Margin with Clients
Financial margin with clients grew 8.3% year-over-year, reaching BRL108 billion in 2024.
Dividend and Share Buyback Program
An additional distribution of BRL18 billion was announced, including BRL15 billion in dividends and interest on capital, and BRL3 billion in share buybacks.
Recognition and Achievements
The bank was recognized as a Value Company of the Year and made significant progress in ESG initiatives, increasing its commitments in sustainable finance.
Improved Credit Quality
The cost of credit decreased from BRL36.9 billion in 2023 to BRL34.5 billion in 2024, with a reduction in NPL indicators.
Lowlights
Challenges in Loan Migration
The One Itau project aimed to migrate 15 million clients, but only 5.3 million were migrated by the end of 2024, with the remaining expected to complete in 2025.
Impact of FX Rate on Loan Growth
A significant portion of the loan portfolio growth is attributed to FX rate effects, which led to exceeding the guidance upper range.
Moderate Growth in Investment Banking
Despite record-breaking performance in 2024, a decrease of 30% to 40% in capital market volumes is expected for 2025.
High Competition in the Market
Increased competition, especially in the high-income segment, was noted as a challenge for maintaining growth and margins.
Company Guidance
During the earnings call, guidance for 2025 was provided with several key financial metrics outlined. The company expects loan portfolio growth to range between 4.5% and 8.5%, while the financial margin with clients is anticipated to increase from 7.5% to 11.5%. The financial margin with the market is projected to be between BRL1 billion and BRL3 billion. Non-interest expenses are expected to grow from 5.5% to 8.5%. Credit cost is projected to nominally range from BRL34.5 billion to BRL38.5 billion, and the effective tax rate is expected to be between 27% and 29%. The guidance included expectations of a 2.2% GDP growth, a year-end SELIC rate of 15.75%, and inflation at 5.8% for 2025.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.