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Itau Unibanco Banco Holding Sa (ITUB)
NYSE:ITUB
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Itau Unibanco
(NYSE:ITUB)
Rating:74Outperform
Price Target:
$7.50
â–²(18.86%Upside)
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
$64.16B
Dividend Yield6.64%
Average Volume (3M)26.01M
Price to Earnings (P/E)9.0
Beta (1Y)0.60
Revenue Growth-6.74%
EPS Growth5.13%
CountryUS
Employees99,600
SectorFinancial
Sector Strength76
IndustryBanks - Regional
Share Statistics
EPS (TTM)0.18
Shares Outstanding5,330,429,700
10 Day Avg. Volume30,941,119
30 Day Avg. Volume26,009,257
Financial Highlights & Ratios
PEG Ratio8.76K
Price to Book (P/B)1.77K
Price to Sales (P/S)0.00
P/FCF Ratio-15.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$7.10Price Target Upside12.52% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Itau Unibanco Business Overview & Revenue Model
Company DescriptionItaú Unibanco Holding S.A. (ITUB) is a leading financial institution based in Brazil and one of the largest banks in Latin America. It operates in various sectors, including retail banking, wholesale banking, and investment banking. The company provides a broad range of financial products and services, such as loans, credit cards, asset management, insurance, and wealth management, serving both individuals and corporate clients across its extensive branch network and digital platforms.
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: 2.27%|
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
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.80
Positive
Balance Sheet
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.75
Positive
Cash Flow
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.60
Neutral
| 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
Neutral
6.31
Price Trends
6.58
Negative
6.07
Positive
5.49
Positive
Market Momentum
-0.07
Positive
41.31
Neutral
24.13
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ITUB, the sentiment is Neutral. The current price of 6.31 is below the 20-day moving average (MA) of 6.56, below the 50-day MA of 6.58, and above the 200-day MA of 5.49, indicating a neutral trend. The MACD of -0.07 indicates Positive momentum. The RSI at 41.31 is Neutral, neither overbought nor oversold. The STOCH value of 24.13 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 (70)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $11.14B | 10.45 | 24.02% | 5.63% | 18.54% | 65.80% | |
75 Outperform | $12.12B | 13.50 | 15.99% | 23.24% | -5.45% | 3.43% | |
74 Outperform | $64.16B | 8.96 | 20.65% | 6.64% | -6.74% | 5.13% | |
70 Outperform | $27.76B | 8.92 | 10.61% | 0.74% | -9.78% | 27.43% | |
70 Outperform | S$32.66B | 14.69 | 11.69% | 4.70% | 8.28% | 16.42% | |
70 Outperform | $17.71B | 15.06 | 10.89% | 6.81% | -3.94% | 31.52% | |
69 Neutral | $14.35B | 10.96 | 23.88% | 0.28% | -17.02% | -10.73% |
* Financial Sector Average
Performance Comparison
ITUB
Itau Unibanco
6.31
1.13
21.81%
BBD
Banco Bradesco SA
2.80
0.69
32.70%
BCH
Banco De Chile
28.36
5.76
25.49%
BSBR
Banco Santander Brasil
4.73
-0.10
-2.07%
BSAC
Banco Santander Chile
23.62
4.15
21.31%
CIB
Bancolombia
44.68
15.98
55.68%
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.