BANCO DO BRASIL DESPENCOU 30% OPORTUNIDADE OU CILADA?

Banco do Brasil, which not long ago was above 20 reais and is now at 16.79, a drop of more than 36%. And now you already know, it’s no news to anyone, that we will have 4 more years of Lula, 4 years of the PT. And compared to Itaú, you can see that Banco do Brasil had a much larger drop. And why? Because BB is a mixed-economy company, meaning there is the possibility of the government interfering in the company's decisions. And now comes the big question. With this drop, Banco do Brasil trading below 17 reais, is this an opportunity or still a trap? To answer that question, we brought in Rodrigão, head of consulting and CNPI analyst at Adnai Capital. And very importantly, subscribe to the channel here because if people aren't subscribing, Rodrigão will only provide the information to consulting clients. It’s all yours, Rodrigão. >> Hey, Mateus. Hey, Renan, and investors here on the channel. And what scared the market and made Banco do Brasil shares melt wasn't just who won the election, it was the prospect of continuity just when many were betting on change. Part of the investors hoped that a change in government would bring a different approach to state-owned companies, reduce the perception of political risk, and make the market willing to pay more for Banco do Brasil . But with Lula's election, this bet lost strength and that distrust weighed back in. When making decisions inside the bank, will the shareholders 'interests be the priority, or will the government's interests become the priority? What changed here was the perception of risk. That by itself doesn't mean there was any interference, but the perception of risk among investors has increased. After all, price doesn't react only to what happened, but also to what the market fears might happen. But this political concern also met another problem. Banco do Brasil was already struggling to collect from a portion of its clients. And if the fiscal scenario worsens and interest rates remain high, it becomes harder to pay debts, renegotiate, and recover credit. So, today at Banco do Brasil, we have two pressures: the continuation of this current government, which increases investor distrust, and also the issue of its business focused on credit, with default rates rising and payments not being received. And we will answer in this video the question that matters. Could Banco do Brasil shares reach 13, 14 reais, or has this recent drop already opened up an unmissable opportunity? To start understanding this , I’ve brought the daily stock quote for Banco do Brasil to the screen. So, on Monday, after the runoff election, the shares fell 29.33%, it was a total meltdown. But as you know, stocks as a whole plummeted on Monday. So let's compare Banco do Brasil's drop here with other major banks, for example , Itaú. Here we have the ITUB3 shares. On Monday, the shares fell 13.4%. It was a very significant drop, but less than half of what Banco do Brasil fell. Let's also look at Santander's shares. So, SAMB11, the units. Santander fell only 4.5%on Monday, but the bank had already been in a significant downtrend . And when we look at Bradesco, let's take the BBDC3 ticker, we also see a 20.6%drop. In other words, Banco do Brasil was the major bank that suffered the most, followed by Bradesco. And this is closely linked to their results. So, it became clear, analyzing Banco do Brasil's Monday drop, that the bank carries additional risks its peers do not. And it's impossible to calculate exactly how much of this drop came from the election and how much came from the expectation of a worsening credit scenario. What we can do here in today's video is separate these two risks and understand how a recovery for BB might come about. And now I want to hear from you: did you buy Banco do Brasil shares between the first and second round of the election? Let me know in the comments, because I know many people bought them and now don't know what to do. Let's start this analysis with what the bank has already delivered. In the second quarter, the adjusted profit was 3.9 billion, better than the previous quarter. But the cost of credit was still here at 18.5 billion reais. In other words, the bank continued to generate revenue, but expenses related to credit losses were consuming a significant part of its earnings. And the improvement in profit didn't mean the problem was solved. And a week before the election, BTG had already raised an alert. The timeliness of agricultural payments was near 75%versus approximately 90% implied in BB's expectations for the second half of the year. In other words, if payments don't normalize, the bank will need to recognize more losses related to them. And these are expenses that directly reduce shareholder profit. And the extent of this concern was also clear in that BTG report. So, the bank estimated a profit of nearly 1.9 billion for the third quarter of this year, which is about half of the consensus among experts at that time. And of course, this is just an estimate ; it doesn't mean this result will materialize, but notice with me, the problem started long before the election . And this is where the discussion reaches your portfolio. If you opened your brokerage account on Monday and saw your portfolio bleeding, you probably thought: "Damn, what do I do now?" Should I dollarize? Should I buy more? Is it an opportunity? And that is exactly why, in times of crisis, you need to have a clear strategy for your portfolio, to know exactly what to do in these moments, or often, what not to do . So, if you have over R $ 100,000 invested, don't currently have a clear strategy, and feel lost in the market, click the link in the description or scan the code here on the screen and sign up for a free portfolio analysis with my consultants here at DNY Capital . In this analysis, we will understand how your portfolio is structured today, what could be improved, what is already good , and also align it with your life goals , family objectives, and whatever you are looking for when investing. Don't put it off; spots are limited. And if you also have a lot of Banco do Brasil in your portfolio today, thinking it was an unmissable opportunity, be sure to sign up. We have already handled numerous cases like this and managed to resolve them in the best possible way. And returning to the bank, there is a point that cannot disappear from this discussion. The problem is not restricted to the agribusiness sector, as many people still say. In a recent report by XP on Banco do Brasil, they considered that in agribusiness we already have higher loss coverage; that is, there are already reserves set aside for losses the bank expected in the agro segment. So, the situation here isn't fully resolved yet, but the bank has already prepared itself well. The big point that has been hitting hard and will continue to be an issue going forward is the matter of credit for individuals. So, credit card default in the second quarter reached 14.6%. This is a very high number. And for individuals, the delinquency rate in the credit portfolio jumped from 6.8%to 8.4%. In other words, the bank today faces pressure not only in agribusiness, but in its individual credit portfolio as well. And this is like trying to get a household's finances in order. You solve it on one side, in this case with Banco do Brasil in agribusiness, but you end up having problems on the other side, in this case the individual loan portfolio . And it's not enough to improve just one part; recovery has to come in the whole set. But, of course, it would also be wrong to show only the problems. After all, the last Banco do Brasil video here on the channel talked only about that. If you want to understand more, go back to it, as it's a video with a lot of quality information. Banco do Brasil announced 16 billion in operations to renegotiate debts for rural producers, which is still in the contracting process. The idea here is to provide conditions for those struggling to organize their debts to start paying again, even if it requires more time to pay. And of course, this can help renegotiate this debt, but it doesn't mean the bank will get all the money back. What we need to monitor here is whether, after this new agreement, the producer will be able to pay the bank. If they can, the recovery will advance. If they can't, the problem at the end of the day was just postponed. So, in the next earnings report on November 11th, I wouldn't just look at whether the profit came in above or below expectations. I would look at three main points that are here on the screen. The first is whether customers are paying better, meaning we have fewer delays and fewer new contracts entering default. This point here is crucial. Second point: are loss expenses falling due to an effective improvement in credit? So, is this sustained drop in expected losses really sustained, are payments improving? Here, we will look at the PDD ( allowance for loan losses). And the third point is the improvement and turnaround of recurring profit with preserved capital. In other words, will we have a consistent result with the capacity to absorb new losses? These are the questions here that I will want to understand. And if the recovery gains strength, you can be sure. We will see signs here in each of these points. And this sequence is interesting because better credit can increase shareholder remuneration. So, if we have a consistent improvement with customers paying better and the bank spending less on losses, we will have more recurring profit, which can expand the capacity to remunerate the shareholder, mainly via dividends. However, if credit continues to worsen with new losses, consuming part of the quarter's gains, one quarter will be insufficient for us to see a turnaround , and this shift will have to appear in future results. And here is a warning. Anyone who bought Banco do Brasil looking only at dividends from recent years definitely made a mistake. You have to keep an eye on the prospects going forward. The market no longer looks at what happened in the past. And finally, what is my opinion on Banco do Brasil before we move on to the price ceiling here? In my view, I wouldn't treat this drop as an obvious opportunity, nor would I buy more just because the price fell a lot or is below my average price. The expectation of a change in government is no longer a possible boost. So this won't influence the price anymore. And of course, the operational recovery, which is the whole issue of credit, still needs confirmation. So let's say Lula continues with his current fiscal policy. The trend is a higher Selic for longer, people in debt, companies in debt, and delinquency naturally rising. So that will hinder Banco do Brasil's recovery. However, at the same time, the bank has the capacity to generate a lot of revenue; it won't go bankrupt. The big question is for us to understand how much of this revenue will actually turn into profit and not go towards credit losses. And for those who already own Banco do Brasil, I would review the reason for the purchase and also the size of the position. And especially if you've been buying Banco do Brasil since it started falling , and it's been falling for a long time , be careful with the size of that position relative to your current portfolio. Even though it may be an opportunity, and the bank is priced at a discount, perhaps this recovery will take time, and that's where the opportunity cost comes in. If you had invested in another asset, you would have had greater gains, even in a possible recovery of BB. And now we reach the part I promised you. Let's calculate the price ceiling for Banco do Brasil together with the updated premises. And if you're enjoying this video, leave a like, subscribe to the channel, and hit the bell to encourage us to bring quality content to you. I've already opened the DN Cap members area, so I've entered the opportunities map and let's calculate it together. So , entering the ticker here, BBAS3, current price, R $ 17.38. The first piece of information we need to input is the projected profit. In this case, I will input the projected profit for 2027, which is how much we expect the bank to earn next year. In this case, we have a projection here of R $ 21.84 billion. So, let's put this projection here, number of shares. So, we have to input all the Banco do Brasil shares here. In this case, I already have the value here: 5730 834040. Let's also include the payout, meaning how much of the profit the bank will allocate to dividends. The payout fluctuates annually. Given the tougher scenario, I'll consider a 35%payout for Banco do Brasil. In other words, whatever profit it makes in 2027, 35%will become dividends. And finally, we input the acceptable yield, meaning the minimum annual return I want to earn to buy Banco do Brasil shares. Given the tougher credit environment and having the government as a partner, I won't use 6%, I'll use 7%. With these premises here. Remembering that everyone can have their own premises, but the more conservative you are, the better, as you'll have a greater margin of safety. Let's calculate our ceiling price, which for Banco do Brasil today is at R $ 19.50. In other words, today there is a margin of safety of about 9.6% and the current price is R $ 1.67 below our ceiling price. And with the ceiling price in hand, we see that there is indeed a margin. Today, we were conservative with our premises. So, for those looking to start a position in Banco do Brasil, it might be a good time. Always buying a little at a time. Break up your purchases, so you will always buy at an interesting average price. However, this drop hasn't become an obvious opportunity. Banco do Brasil still has many problems to solve and it will only recover if those problems are addressed. And the big point here is that this recovery might take longer than the investor is expecting. I know investors in the market, famous investors, who have been buying Banco do Brasil since those first drops and are still suffering loss after loss today. So the risk here is not just the stock falling further, but the recovery taking longer than you plan. And now I want to hear from you: do you have Banco do Brasil in your portfolio today? Do you intend to buy? Leave it in the comments below and see you in the next video.