Itau Unibanco (ITUB) AI Stock Analysis

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Itau Unibanco

(NYSE:ITUB)

Rating:76Outperform

Price Target:

$7.50

▲(9.33% Upside)

Itau Unibanco's strong financial performance and attractive valuation are the primary drivers of its score. Positive earnings call sentiment further supports the outlook, although technical indicators suggest caution due to potential overbought conditions. The negative cash flow in 2024 is a risk that needs monitoring.

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

$69.32B

Dividend Yield6.36%

Average Volume (3M)28.22M

Price to Earnings (P/E)9.7

Beta (1Y)0.61

Revenue Growth5.44%

EPS Growth2.81%

CountryUS

Employees99,600

SectorFinancial

Sector Strength71

IndustryBanks - Regional

Share Statistics

EPS (TTM)0.19

Shares Outstanding5,330,429,700

10 Day Avg. Volume30,505,084

30 Day Avg. Volume28,223,784

Financial Highlights & Ratios

PEG Ratio0.29

Price to Book (P/B)1.44

Price to Sales (P/S)0.93

P/FCF Ratio-3.09

Enterprise Value/Market Cap3.06

Enterprise Value/Revenue0.63

Enterprise Value/Gross Profit1.66

Enterprise Value/Ebitda3.88

Forecast

1Y Price Target

$7.30

Price Target Upside6.41% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering2

Itau Unibanco Business Overview & Revenue Model

Company DescriptionItaú Unibanco Holding S.A. is one of the largest financial institutions in Brazil and Latin America, offering a comprehensive range of banking and financial services. The company operates in various segments including retail banking, wholesale banking, asset management, insurance, and investment banking. Its core products and services include personal and commercial loans, credit cards, savings and investment accounts, wealth management, and insurance solutions, catering to both individual and corporate clients.

How the Company Makes MoneyItaú Unibanco generates revenue through multiple streams, primarily from interest income derived from loans and credit products, which constitute a significant portion of their earnings. The bank charges interest on various types of loans, including personal loans, mortgages, and business financing. Additionally, Itaú earns fees from services such as credit card transactions, account maintenance, and investment management. The bank also benefits from asset management services, where it charges management fees on funds and portfolios it administers. Furthermore, Itaú Unibanco engages in capital markets activities, including underwriting and advisory services, contributing to its revenue. Significant partnerships, such as those with fintech companies and other financial institutions, enhance its service offerings and customer reach, thereby supporting its overall earnings potential.

Itau Unibanco Earnings Call Summary

Earnings Call Date:Aug 05, 2025

(Q2-2025)

% Change Since: 5.86%|

Next Earnings Date:Nov 04, 2025

Earnings Call Sentiment Positive

The earnings call highlighted a strong financial performance with significant net income growth, ROE expansion, and a successful digital transformation, indicating robust operational success. However, challenges such as underperformance in payroll loans and a higher effective tax rate were noted. Overall, the positive aspects significantly outweigh the challenges, suggesting a strong and optimistic outlook.

Q2-2025 Updates

Positive Updates

Strong Net Income Growth

Net income reached BRL 11.5 billion, marking a 3.4% increase over the previous quarter and a 14.3% increase year-over-year.

Record Return on Equity

Consolidated ROE reached 23.3%, with Brazil's ROE at 24.4%, showing expansion both quarter-over-quarter and year-over-year.

NIM Expansion

Net interest margin (NIM) expanded to 9.2% on a consolidated basis and reached double digits at 10% in Brazil, for the first time since 2019.

Controlled Delinquency Rates

Consolidated NPL over 90 days remained stable at 1.9%, and in Brazil, it was 2.0%, indicating strong credit quality.

Loan Portfolio Growth

The individual loan book grew 8.0% year-over-year, with a notable 1.6% quarterly increase in credit card loans.

Digital Transformation Success

One Itau platform migrated over 10 million clients with an NPS of 80 points and a conversion rate of 99.3%.

Positive Fee Income Growth

Insurance, pension, and capitalization businesses grew 8.8% in the quarter and 17.3% year-over-year.

Robust Capital Generation

Common equity tier ratio increased by 50 basis points quarter-over-quarter, reaching 13.1%.

Negative Updates

Underperformance in Payroll Loans

Payroll loans underperformed due to interest rate caps and process changes, impacting growth.

Slow Growth in Latin American Portfolio

The loan portfolio in Latin America declined by 2.3%, influenced by currency fluctuations.

Higher Effective Tax Rate

The effective tax rate was revised upwards from 27%-29% to 28.5%-30.5% due to earnings from banking operations.

Challenges in Advisory & Brokerage Services

Revenues declined quarter-over-quarter and year-over-year, mainly due to lower DCM activities.

Company Guidance

In the second quarter of 2025, the company reported a net income of BRL 11.5 billion, representing a 3.4% increase from the first quarter and a 14.3% rise year-over-year. The consolidated return on equity (ROE) reached 23.3%, with Brazil's ROE at 24.4%. If operating with an 11.5% capital ratio, consolidated ROE would be 24.7% and 26.1% in Brazil. The company achieved these results through a strong quarter in NII with clients, growing 3.1% from the previous quarter and 15.4% year-over-year. NIM expanded to 9.2% on a consolidated basis and 10% in Brazil. Delinquency rates remained stable, with consolidated NPL over 90 days at 1.9% and 2.0% in Brazil. The CET1 ratio increased by 50 basis points quarter-over-quarter. The individual loan book saw an 8.0% year-over-year growth, and the total credit portfolio grew 0.4% in the quarter, 1.3% excluding FX impact. The company reaffirmed its guidance for several metrics, updating the NII with clients' growth to a range of 11% to 14%, while adjusting the effective tax rate range to 28.5% to 30.5%.

Itau Unibanco Financial Statement Overview

Summary

Itau Unibanco has demonstrated strong revenue growth and improved profitability with a solid net profit margin and shareholder returns. However, the negative cash flow in 2024 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	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	338.83B	325.85B	306.63B	253.12B	191.49B	173.58B
Gross Profit	127.74B	129.10B	116.82B	108.23B	108.18B	75.57B
EBITDA	54.79B	54.00B	45.35B	41.49B	46.46B	8.96B
Net Income	41.78B	41.09B	33.10B	29.21B	26.76B	18.90B
Balance Sheet
Total Assets	2.80T	2.85T	2.54T	2.32T	2.07T	2.02T
Cash, Cash Equivalents and Short-Term Investments	285.73B	637.43B	615.43B	577.22B	517.40B	570.11B
Total Debt	905.31B	905.63B	814.62B	721.40B	574.07B	577.99B
Total Liabilities	2.59T	2.63T	2.34T	2.14T	1.90T	1.86T
Stockholders Equity	201.14B	211.09B	190.18B	167.72B	152.86B	142.99B
Cash Flow
Free Cash Flow	-42.22B	-98.15B	68.30B	121.47B	51.02B	54.18B
Operating Cash Flow	-34.55B	-96.32B	77.49B	129.97B	60.11B	59.49B
Investing Cash Flow	-52.70B	6.97B	-31.23B	-73.60B	-4.84B	753.00M
Financing Cash Flow	60.39B	81.69B	57.47B	-31.71B	-31.46B	288.39B

Itau Unibanco Technical Analysis

Technical Analysis Sentiment

Positive

Last Price6.86

Price Trends

50DMA

6.54

Positive

100DMA

6.25

Positive

200DMA

5.56

Positive

Market Momentum

MACD

0.07

Negative

RSI

66.44

Neutral

STOCH

98.22

Negative

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 6.86 is above the 20-day moving average (MA) of 6.43, above the 50-day MA of 6.54, and above the 200-day MA of 5.56, indicating a bullish trend. The MACD of 0.07 indicates Negative momentum. The RSI at 66.44 is Neutral, neither overbought nor oversold. The STOCH value of 98.22 is Negative, 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
CIB	78 Outperform	$12.22B	10.79	16.25%	13.62%	-8.45%	29.39%
ITUB	76 Outperform	$69.32B	9.72	20.49%	6.36%	5.44%	2.81%
BCH	74 Outperform	$14.62B	11.42	22.07%	7.26%	-13.16%	-8.10%
BSAC	74 Outperform	$11.31B	10.64	24.02%	5.53%	18.54%	65.80%
BSBR	70 Outperform	$18.52B	18.08	9.43%	6.16%	-3.77%	-10.59%
Sector *	67 Neutral	$17.22B	11.28	10.45%	3.94%	10.30%	1.07%
BBD	66 Neutral	$28.96B	8.49	11.76%	2.03%	-4.58%	39.03%

* Financial Sector Average

Performance Comparison

ITUB

Itau Unibanco

6.86

1.55

29.19%

BBD

Banco Bradesco SA

2.90

0.39

15.54%

BCH

Banco De Chile

28.73

5.81

25.35%

BSBR

Banco Santander Brasil

4.93

-0.14

-2.76%

BSAC

Banco Santander Chile

23.97

4.91

25.76%

CIB

Bancolombia

48.06

19.76

69.82%

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: Aug 11, 2025