Banco Bradesco SA (BBD) AI Stock Analysis

1,047 Followers

Top Page

Banco Bradesco SA

(NYSE:BBD)

70Outperform

Banco Bradesco SA shows a promising outlook with strong income growth and operational efficiency. The stock is technically strong, showing positive momentum. Valuation metrics indicate it is undervalued, offering potential upside. However, liquidity concerns and high leverage remain key risks. Cautious earnings guidance suggests potential headwinds in 2025, warranting careful monitoring.

Banco Bradesco SA (BBD) vs. S&P 500 (SPY)

Market Cap

$21.54B

Dividend Yield1.36%

Average Volume (3M)42.55M

Price to Earnings (P/E)7.3

Beta (1Y)0.33

Revenue Growth-8.55%

EPS Growth13.58%

CountryUS

Employees72,642

SectorFinancial

Sector Strength84

IndustryBanks - Regional

Share Statistics

EPS (TTM)0.30

Shares Outstanding5,311,865,700

10 Day Avg. Volume47,317,452

30 Day Avg. Volume42,553,768

Financial Highlights & Ratios

PEG Ratio0.53

Price to Book (P/B)N/A

Price to Sales (P/S)1.42

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

$2.00

Price Target Upside-8.68% Downside

Rating ConsensusModerate Sell

Number of Analyst Covering2

Banco Bradesco SA Business Overview & Revenue Model

Company DescriptionBanco Bradesco S.A., together with its subsidiaries, provides various banking products and services to individuals, corporates, and businesses in Brazil and internationally. The company operates through two segment, Banking and Insurance. It provides current, savings, click, and salary accounts; real estate credit, vehicle financing, payroll loans, mortgage loans, microcredit, leasing, and personal and installment credit; debit and business cards; financial and security services; consortium products; auto, personal accident, dental, travel, and life insurance; investment products; pension products; real estate and vehicle auctions; cash management, and foreign trade and exchange services; capitalization bonds; and internet banking services. Banco Bradesco S.A. was founded in 1943 and is headquartered in Osasco, Brazil.

How the Company Makes MoneyBanco Bradesco SA generates revenue primarily through interest income from its lending activities, including personal and commercial loans. The bank also earns money from fees and commissions associated with its banking services, such as transaction fees, account maintenance fees, and fees from asset management and investment services. Additionally, Bradesco's insurance segment contributes to its earnings by providing various insurance products, with revenue coming from premiums. The bank's partnerships and network of branches across Brazil, as well as its digital banking platforms, further bolster its revenue streams by expanding its customer base and enhancing service delivery.

Banco Bradesco SA Financial Statement Overview

Summary

Banco Bradesco SA demonstrates strong revenue growth and efficient operations, evident from a 15.4% revenue increase and a robust EBIT margin of 39.1%. However, high leverage with a debt-to-equity ratio of 1.52 poses risks, and significant concerns arise from negative operating cash flow, impacting financial stability.

Income Statement

Positive

Banco Bradesco SA has shown a mixed performance in its income statement. The company experienced a revenue increase from 2023 to 2024, with a substantial growth rate of approximately 15.4%. However, the net profit margin was around 21.9% in 2024, which is relatively stable. The EBIT margin is strong at 39.1%, indicating efficient operational performance. However, the historical fluctuation in revenue and net income suggests some volatility in earnings.

Balance Sheet

Positive

The balance sheet of Banco Bradesco SA presents a solid equity position with an equity ratio of approximately 8.1% in 2024. The debt-to-equity ratio is high at 1.52, reflecting significant leverage, which could pose risks if not managed properly. However, the company has maintained a stable stockholders' equity trend over the years, suggesting a strong capital base.

Cash Flow

Neutral

The cash flow statement indicates challenges for Banco Bradesco SA, with a negative operating cash flow in 2024. The free cash flow has declined significantly, showing a concerning trend in liquidity. The free cash flow to net income ratio is negative, suggesting potential cash management issues. Despite these concerns, the company has a history of positive free cash flow in earlier years, showing some potential for recovery.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
78.89B	68.35B	109.00B	102.43B	82.37B
	Gross Profit
78.89B	68.35B	106.34B	102.43B	82.37B
	EBIT
30.81B	23.04B	155.29B	32.64B	3.88B
	EBITDA
0.00	0.00	0.00	0.00	0.00
	Net Income Common Stockholders
17.25B	14.25B	21.22B	23.17B	15.84B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
36.83B	0.00	28.55B	21.28B	23.85B
	Total Assets
2.07T	1.93T	1.79T	1.68T	1.60T
	Total Debt
256.03B	359.49B	338.99B	284.55B	181.72B
	Net Debt
219.20B	187.64B	310.44B	263.27B	157.88B
	Total Liabilities
1.90T	1.76T	1.63T	1.53T	1.46T
	Stockholders Equity
168.41B	166.33B	159.53B	149.78B	145.62B
Cash Flow		Free Cash Flow
-93.62B	-9.32B	32.35B	-106.41B	138.17B
	Operating Cash Flow
-91.33B	-177.63M	41.77B	-102.00B	142.43B
	Investing Cash Flow
-5.01B	83.61B	-17.78B	-19.31B	20.46B
	Financing Cash Flow
117.88B	-23.06B	21.92B	-1.61B	-36.41B

Banco Bradesco SA Technical Analysis

Technical Analysis Sentiment

Positive

Last Price2.19

Price Trends

50DMA

2.11

Positive

100DMA

2.05

Positive

200DMA

2.24

Negative

Market Momentum

MACD

0.02

Positive

RSI

53.14

Neutral

STOCH

50.98

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BBD, the sentiment is Positive. The current price of 2.19 is below the 20-day moving average (MA) of 2.20, above the 50-day MA of 2.11, and below the 200-day MA of 2.24, indicating a neutral trend. The MACD of 0.02 indicates Positive momentum. The RSI at 53.14 is Neutral, neither overbought nor oversold. The STOCH value of 50.98 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for BBD.

Banco Bradesco SA Risk Analysis

Banco Bradesco SA disclosed 42 risk factors in its most recent earnings report. Banco Bradesco SA 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

Banco Bradesco SA Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CIB	77 Outperform	$9.72B	11.03	15.62%	16.42%	-0.15%	8.78%
BAP	74 Outperform	$14.15B	9.64	16.36%	5.21%	5.84%	12.67%
BSAC	73 Outperform	$10.29B	11.63	16.05%	2.55%	-22.63%	32.31%
BCH	73 Outperform	$13.18B	10.45	21.96%	5.93%	-19.01%	-13.44%
BBD	70 Outperform	$21.54B	7.26	10.44%	1.36%	-8.55%	13.58%
BSBR	70 Neutral	$17.02B	13.75	11.61%	4.79%	-3.94%	31.52%
Sector *	64 Neutral	$13.34B	9.25	9.42%	4.85%	16.07%	-8.44%

* Financial Sector Average

Performance Comparison

BBD

Banco Bradesco SA

2.19

-0.31

-12.40%

BCH

Banco De Chile

26.45

5.93

28.90%

BSBR

Banco Santander Brasil

4.57

-0.45

-8.96%

BSAC

Banco Santander Chile

22.31

4.07

22.31%

CIB

Bancolombia

37.73

9.24

32.43%

BAP

Credicorp

177.87

28.60

19.16%

Banco Bradesco SA Earnings Call Summary

Earnings Call Date: Feb 7, 2025 | % Change Since: -0.45% | Next Earnings Date: May 8, 2025

Earnings Call Sentiment Positive

The earnings call reflects a positive outlook with significant growth in net income, digital transformation, loan portfolio, and insurance sales. However, the outlook for 2025 is cautious due to macroeconomic conditions, and there are challenges related to narrowing margins in certain loan segments and restructuring costs.

Highlights

Significant Net Income Growth

For the fourth quarter, net income was BRL5.4 billion, representing a growth of 37%. For the full year 2024, net income reached BRL19.6 billion, a 20% increase.

Digital Transformation and Customer Base Expansion

99% of transactions occurred through digital channels. The customer base grew by more than 2 million clients, and the Bradesco Expresso platform contributed to a better customer experience.

Loan Portfolio and Insurance Growth

Total loan portfolio grew almost 12% year-on-year. Insurance sales increased by 49%, and the insurance company's revenue grew by 16.6% year-on-year.

Expansion in Assets Under Management

BRAM grew assets under management to BRL122 billion, and Bradesco received two awards from Infomoney for best customer experience.

Strong Performance in SME and Middle Market Lending

The portfolio for micro, small, and medium-sized companies grew by 28% during the period.

Lowlights

Conservative Guidance for 2025

Guidance for 2025 is more cautious due to a conservative macroeconomic scenario and includes anticipated effects of regulations and investments.

Narrowing Margins in Certain Loan Segments

Personal loans grew in safer lines, but margins were lower, and there was pressure on gross margin due to INSS caps and public payroll deductible loans.

Operational Challenges and Restructuring Costs

Restructuring costs incurred due to footprint review and transformation initiatives, with a non-recurring provision of approximately BRL440 million.

Company Guidance

In the call, Marcelo de Araujo Noronha provided detailed guidance for Bradesco's financial outlook in 2025, emphasizing a cautious approach due to the macroeconomic environment. The bank's net income for the fourth quarter of 2024 was BRL5.4 billion, showing a 37% growth, with a full-year net income of BRL19.6 billion, a 20% increase. Total revenue reached over BRL32 billion, growing by 7.9% year-on-year, while the total loan portfolio exceeded BRL980 billion, marking a nearly 12% growth. The client NII rose by 5.4% year-on-year. The bank maintained a cost of risk at approximately 3% and highlighted efficiency gains and transformation efforts. Additionally, Bradesco achieved a capital ratio of 12.8% after the implementation of Resolution 4,966, and the insurance business posted a 13.6% revenue growth. Looking forward, Bradesco aims for a portfolio growth of 4% to 8% in 2025, with a focus on maintaining controlled portfolios and leveraging their digital channels, which facilitated 99% of transactions in 2024.

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.