Itau Unibanco (ITUB) AI Stock Analysis

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Itau Unibanco

(NYSE:ITUB)

Rating:74Outperform

Price Target:

$7.50

▲(10.46%Upside)

Itau Unibanco's overall stock score is primarily driven by its robust financial performance and attractive valuation. The company's strong revenue growth, improved profitability metrics, and low P/E ratio are significant strengths. Technical analysis supports a neutral to slightly bullish outlook, enhancing the stock's attractiveness despite the cash flow concerns.

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%.

Loan Growth

Loan growth accelerated for the third consecutive quarter, driven by stronger growth in credit to consumers and SMEs.

Negative Factors

Fee Growth

Fee growth decelerated to 5% year-over-year, influenced by declining current account tariffs and deceleration of credit card fees.

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. SPDR S&P 500 ETF (SPY)

Market Cap

$67.83B

Dividend Yield8.02%

Average Volume (3M)29.57M

Price to Earnings (P/E)9.4

Beta (1Y)0.55

Revenue Growth-6.74%

EPS Growth5.13%

CountryUS

Employees99,600

SectorFinancial

Sector Strength79

IndustryBanks - Regional

Share Statistics

EPS (TTM)0.18

Shares Outstanding5,330,429,700

10 Day Avg. Volume25,187,518

30 Day Avg. Volume29,569,534

Financial Highlights & Ratios

PEG Ratio1.27

Price to Book (P/B)2.16

Price to Sales (P/S)0.00

P/FCF Ratio9.55

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$6.55

Price Target Upside-3.53% Downside

Rating ConsensusModerate Buy

Number of Analyst Covering2

Itau Unibanco Business Overview & Revenue Model

Company DescriptionItaú Unibanco Holding S.A. offers a range of financial products and services to individuals and corporate customers in Brazil and internationally. The company operates through three segments: Retail Banking, Wholesale Banking, and Activities with the Market and Corporation. It offers various deposit products, as well as loans and credit cards; investment and commercial banking services; real estate lending services; financing and investment services; and leasing and foreign exchange services. The company also provides property and casualty insurance products covering loss, damage, or liabilities for assets or persons, as well as life insurance products covering death and personal accident; and reinsurance products. It serves retail customers, account and non-account holders, individuals and legal entities, high income clients, microenterprises, and small companies. The company was formerly known as Itaú Unibanco Banco Múltiplo S.A. and changed its name to Itaú Unibanco Holding S.A. in April 2009. The company was incorporated in 1924 and is headquartered in São Paulo, Brazil. Itaú Unibanco Holding S.A. is a subsidiary of IUPAR - Itaú Unibanco Participações S.A.

How the Company Makes MoneyItaú Unibanco generates revenue through a diversified model primarily based on interest income from its lending operations and fees from a wide range of financial services. The key revenue streams include interest earned on loans and advances to customers, credit card operations, and mortgages. Additionally, the bank earns significant non-interest income from fees and commissions on services like asset and wealth management, insurance products, and investment banking. Itaú Unibanco also engages in trading activities and has strategic partnerships and investments that further contribute to its earnings. The bank's robust digital banking platform and extensive branch network are crucial factors driving customer acquisition and retention, enhancing its revenue-generating capabilities.

Itau Unibanco Earnings Call Summary

Earnings Call Date:May 08, 2025

(Q4-2024)

% Change Since: 10.05%|

Next Earnings Date:Aug 05, 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.

Q4-2024 Updates

Positive Updates

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.

Negative Updates

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.

Itau Unibanco Financial Statement Overview

Summary

Itau Unibanco has strong revenue growth and improved profitability metrics, with positive trends in leverage and shareholder returns. However, the negative cash flow in 2024 is a concern and poses a risk to long-term sustainability.

Income Statement

Positive

Itau Unibanco demonstrated strong revenue growth, with a significant increase from 2023 to 2024. The net profit margin improved alongside a healthy EBIT margin, indicating efficient cost management. However, the absence of EBITDA in 2024 limits a full analysis of operational performance.

Balance Sheet

Positive

The company's debt-to-equity ratio has improved, showing a decrease in leverage compared to previous years. The equity ratio remains stable, and return on equity has shown positive trends, reflecting strong shareholder value creation. However, the substantial total debt remains a point of concern.

Cash Flow

Neutral

The cash flow analysis indicates a challenging year with negative free cash flow in 2024 and a significant drop in operating cash flow. Despite this, the historical trend shows strong cash generation capabilities, which may help in future recovery.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	325.85B	306.63B	253.12B	191.49B	173.58B
Gross Profit	129.10B	116.82B	108.23B	108.18B	75.57B
EBITDA	54.00B	45.35B	41.49B	46.46B	8.96B
Net Income	41.09B	33.10B	29.21B	26.76B	18.90B
Balance Sheet
Total Assets	2.85T	2.54T	2.32T	2.07T	2.02T
Cash, Cash Equivalents and Short-Term Investments	637.43B	615.43B	577.22B	517.40B	570.11B
Total Debt	905.63B	814.62B	721.40B	574.07B	577.99B
Total Liabilities	2.63T	2.34T	2.14T	1.90T	1.86T
Stockholders Equity	211.09B	190.18B	167.72B	152.86B	142.99B
Cash Flow
Free Cash Flow	-98.15B	68.30B	121.47B	51.02B	54.18B
Operating Cash Flow	-96.32B	77.49B	129.97B	60.11B	59.49B
Investing Cash Flow	6.97B	-31.23B	-73.60B	-4.84B	753.00M
Financing Cash Flow	81.69B	57.47B	-31.71B	-31.46B	288.39B

Itau Unibanco Technical Analysis

Technical Analysis Sentiment

Positive

Last Price6.79

Price Trends

50DMA

6.46

Positive

100DMA

5.88

Positive

200DMA

5.43

Positive

Market Momentum

MACD

0.08

Positive

RSI

61.71

Neutral

STOCH

60.25

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ITUB, the sentiment is Positive. The current price of 6.79 is above the 20-day moving average (MA) of 6.62, above the 50-day MA of 6.46, and above the 200-day MA of 5.43, indicating a bullish trend. The MACD of 0.08 indicates Positive momentum. The RSI at 61.71 is Neutral, neither overbought nor oversold. The STOCH value of 60.25 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (67)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BSAC	76 Outperform	$11.77B	11.07	24.02%	5.27%	18.54%	65.80%
CIB	75 Outperform	$11.48B	13.25	15.99%	14.91%	-5.45%	3.43%
ITUB	74 Outperform	$67.83B	9.42	20.65%	8.02%	-6.74%	5.13%
BCH	73 Outperform	$15.11B	11.46	23.88%	6.92%	-17.02%	-10.73%
BBD	70 Outperform	$30.14B	9.62	10.61%	1.26%	-9.78%	27.43%
BSBR	70 Outperform	$20.12B	16.52	10.89%	5.11%	-3.94%	31.52%
Sector *	67 Neutral	$16.85B	11.65	9.71%	3.90%	11.61%	-9.60%

* Financial Sector Average

Performance Comparison

ITUB

Itau Unibanco

6.79

1.72

33.93%

BBD

Banco Bradesco SA

3.09

0.96

45.07%

BCH

Banco De Chile

30.25

8.02

36.08%

BSBR

Banco Santander Brasil

5.51

0.74

15.51%

BSAC

Banco Santander Chile

25.03

6.85

37.68%

CIB

Bancolombia

45.72

17.37

61.27%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Jun 11, 2025