NEWS BITES - BRIC
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Banco do Brasil SA's (SA: BBAS3 R$46.42) stock price decreased 27.0 centavos (0.6%) from its previous trading session to close at R$46.42.
Compared with the Bovespa Index which fell 84.0 points (0.07%) in the day, the relative price change was -0.5%.
Banco do Brasil SA is Brazil's largest Bank by market cap.
There were 9,100,000 shares worth R$422.4 million ($85.6 million) traded today. The volume was 0.7 times the average daily trading volume of 13.2 million shares.
Financial News
Quarterly Report (Q2/2023):
Quarterly Report Analysis Q2 2023: Banco do Brasil reports 15% sequential rise in Quarterly Net Profit
Banco do Brasil (SA:BBAS3), announced net profit of BRL9.4b ($1.9b) for the quarter-ended 30 June 2023 [Q2/2023], up 15% from the previous quarter [Q1/2023] and up 9.6% from the year-earlier period [Q2/2022].
Quarterly Report (Q2 2023)
| Quarter-ended | 30 Jun [Q2/2023] | 31 Mar [Q1/2023] | 30 Sep [Q3/2022] |
| EPS | BRL2.9 | - | BRL2.6 |
| Revenue, BRL | 64.1billion | 60.3billion | - |
| Revenue, $ | 13.2billion | 12.4billion | - |
| Net Profit, BRL billion | 9.4 | 8.2 | 7.5 |
| Net Profit, $ billion | 1.9 | 1.7 | 1.5 |
Compared with the Previous Corresponding Period [PCP; Q2/2022], year-over-year [y.o.y.] EPS was down 2%, Revenue was down 5.2% and Net Profit was up 9.6%.
| Quarter-ended | 30 Jun [Q2/2023] | 30 Jun [Q2/2022] |
| EPS, BRL | 2.9 | 3.0 |
| PCP growth in EPS % | -2.0 | - |
| Revenue, BRL billion | 64.1 | 67.6 |
| Revenue, $ billion | 13.2 | 13.9 |
| PCP growth in Revenue % | -5.2 | 853 |
| Net Profit, BRL billion | 9.4 | 8.6 |
| Net Profit, $ billion | 1.9 | 1.8 |
| PCP growth in Net Profit % | 9.6 | 56 |
Bullish Turning Point
Williams % R
The stock is oversold according to the Williams % R indicator of -80.4, suggesting the price is close to its 14-day low. The Williams % R was previously -68.5.
BANCO DO BRASIL (BBAS3) Stock Dashboard [traded in Brazilian Real, BRL] End-of-Day
| Exchange | BRAZILIAN [Sao Paulo] | Sector | Bank |
| Currency | 1.000 USD = 4.94 Brazilian Real (BRL) | Independent Rating | Ranked 268 in Forbes 2000 |
| Sep 25, 2023 | BRL46.42 | Market Cap | BRL133 billion [US$27 billion] |
| DPS (past 12 months) | BRL5 | Shares Outstanding | 2,865,417,020 |
| EPS Growth (Q2 2023 vs Q2 2022) | -2.0% | % Held by Top Shareholder | 50 |
| Ave Daily Volume | 13,199,040 shares | BBAS3 in Indices | Bovespa [of 92 stocks] |
| 52-Week Price Range | 28.00 - 50.76 | PVBRL1000 (1 yr) PVUS$1000 (1 yr) | BRL1,463 US$1,534* |
*If You Invested $1,000 in Banco do Brasil a year ago, This is How Much You Would Have Today: $1,534. USD1000 would have bought BRL6,974 for 143.4 shares (@the then price of 36.09) worth BRL1,463 @46.42 today. Dividends reinvested are worth $185.
INDEX
SECTION 1 RECENT NEWS AND RESEARCH
SECTION 2 TODAY'S BEARISH SIGNALS
SECTION 3 ONGOING BEARISH PARAMETERS
SECTION 4 TODAY'S BULLISH SIGNALS
SECTION 5 ONGOING BULLISH PARAMETERS
SECTION 6 CORPORATE PROFILE
SECTION 7 BANK METRICS
APPENDIX I DATA & ARCHIVE DOWNLOAD CENTER
APPENDIX II STOCK IDENTIFIERS
GLOSSARY
SECTION 1 RECENT NEWS AND RESEARCH
Press Releases and Corporate Wire
August 28: Banco do Brasil announces dividend
Banco do Brasil today announced a special dividend of 33.42 centavos per share. The ex-dividend date is Tuesday, September 12, 2023 and the record date is Monday, September 11, 2023 and it is payable on Friday, September 29.
August 11: Banco do Brasil announces dividend
Banco do Brasil today announced a special dividend of 65.47 centavos per share. The ex-dividend date is Tuesday, August 22, 2023 and the record date is Monday, August 21, 2023 and it is payable on Wednesday, August 30.
August 11: Banco do Brasil announces dividend
Banco do Brasil today announced a cash dividend of 14.37 centavos per share. The ex-dividend date is Tuesday, August 22, 2023 and the record date is Monday, August 21, 2023 and it is payable on Wednesday, August 30.
SECTION 2 TODAY'S BEARISH SIGNALS
2.1 PAST WEEK: WEAK MOMENTUM DOWN
BBAS3 dips 2.0% on weak volume 0.6 times average. Compared with the Bovespa Index which fell 2,363.6 points (or 2.0%) in the week, the relative price increase was 0.04%.
The price ranged between a low of R$46.42 on Monday Sep 25 and a high of R$47.70 on Wednesday Sep 20.
| Sep | Banco do Brasil | Close [BRL] | Change % | Comment |
| Mon 25 | Decreases | 46.42 | -0.6 | Price/MAP50 below 1 |
| Fri 22 | Offers dividend yield of 10.5% | 46.69 | 0.2 | Price rise on rising relative strength |
| Thu 21 | Offers dividend yield of 10.6% | 46.61 | -2.3 | Steepest Fall |
| Wed 20 | Increases | 47.7 | 0.9 | Top Rise |
| Tue 19 | Offers dividend yield of 10.4% | 47.28 | -0.1 | Price rise on rising relative strength |
* RPC - Relative Price Change is % price change of stock less % change of the Bovespa Index.
2.2 Downtrend
Past Quarter:
- The shares had their worst quarter in three quarters since the quarter ended December 23, 2022.
2.3 Other Bearish Signals
- Net profit margin has averaged 12.7% in the last 3 years. This is lower than the sector average of 30.6% and suggests a low margin of safety.
SECTION 3 ONGOING BEARISH PARAMETERS
3.1 Present Value of R$1000 Invested in the Past 3 Months; The Worst Period with PVR$1000 < 955
| PVR$1,000 | 3 mo ago |
| BBAS3.SA | R$954 |
| Bank sector | R$918 |
| Bovespa Index | R$987 |
3.2 Past quarter: price fall of 6.8%
3-Month price change of -6.8% for Banco do Brasil underperformed the change of -1.4% in the Bovespa Index for a relative price change of -5.5%.
| Price Change % | Quarter |
| Banco do Brasil | -6.8 |
| Bank sector | -8.2 |
| Bovespa Index | -1.4 |
SECTION 4 TODAY'S BULLISH SIGNALS
4.1 Relative Value Indicators: Undervaluation compared with sector averages
Brand Value/Enterprise Value:
- Brandirectory have estimated Banco do Brasil brand value at R$48.8 billion ($9.9 billion). The Brand Value represents 2.3% of the estimated Enterprise Value of R$2,162 billion ($438 billion). Enterprise Value is defined as MCap of R$133 billion plus net debt of R$2,029 billion.Banco do Brasil stock is the twelfth highest dividend yielding stock in the Bovespa Index.
4.2 Relative Value Indicators: Undervaluation compared with Index averages and bond yield
Dividend Yield > 2/3rd Bond Yield:
The dividend yield of 10.6% is 0.94 times the triple-A bond yield of 11.29%; it is also above the benchmark of 2/3rd set by Benjamin Graham.
(All figures in %)
| Dividend Yield | 10.6 |
| Bond Yield | 11.29 |
| Spread | 0.69 |
The Dividend Yield of 10.6% is better than the Index average of 8.9%
- The relative yield of the stock, defined by its yield of 10.6%, divided by average yield of dividend yielding stocks in the Bovespa Index of 8.9% is 118.6%. This suggests the stock is undervalued in dividend yield terms.
| Sector | Dividend Yield % | |
| Corporate Knights | Stock: 10.6; Sector: 0.8 | undervalued |
4.3 Rank in the top 15% by Relative Valuation in the Brazilian market
| Description | Value | Rank |
| Dividend Yield % | 10.6% | In Top 15% |
4.4 Rank in the top 22% by Price Performance in the Brazilian market
| Description | Value | Rank |
| PV1000 [1 yr] $ | 1,534 | In Top 22% |
4.5 Uptrend
Price/Moving Average Price of 1.14 and positive MACD:
- The Price/MAP 200 for Banco do Brasil is 1.14. Being higher than 1 is a bullish indicator. It is higher than the Price/MAP 200 for the Bovespa Index of 1.04, a second bullish indicator. The stock is trading above both its MAPs and the 50-day MAP of R$46.75 is higher than the 200-day MAP of R$40.65, a third bullish indicator.
- The Moving Average Convergence Divergence (MACD) indicator of 12-day Exponential Moving Average (EMA) of 46.99 minus the 26-day EMA of 46.98 is positive, suggesting a bullish signal.
4.6 Other Bullish Signals
- Return on Equity of 19.0% versus sector average of 14.6% and market average of 3.7%.
- As per the Du Pont analysis, Return on Equity of 19.0% is better than sector average of 14.6%. This is computed as net profit margin of 12.9% times asset turnover [sales/assets] of 0.12 times leverage factor [total assets/shareholders' equity] of 12.4.
4.7 Oversold/Bullish Signals:
- The stock is oversold according to the Williams % R indicator of -80.4, suggesting the price is close to its 14-day low of R$45.97.
SECTION 5 ONGOING BULLISH PARAMETERS
5.1 Rule of 40
The stock scores a favorable score exceeding 40 when using the Rule of 40 (Revenue Growth plus EBITDA margin). Y.o.y revenue growth of 81%, EBITDA margin is 19.5% and the sum of the two 100.8% needs to exceed 40%.
5.2 Past three-years
- Banco do Brasil rose for a third consecutive year. In the past three years it has risen R$23.08 (98.9%).
5.3 Present Value of R$1000 Invested in the Past [1 Yr, 3 Yrs]; The Best Periods with PVR$1000 > 1,462
| PVR$1,000 | 1 yr ago | 3 yrs ago |
| BBAS3.SA | R$1,463 | R$2,628 |
| Bank sector | R$1,058 | R$1,177 |
| Bovespa Index | R$1,038 | R$1,195 |
5.4 The Best Periods [1 Yr, 3 Yrs] with Price Change % > 28.5
3-Year price change of 95.5% for Banco do Brasil outperformed the change of 19.5% in the Bovespa Index for a relative price change of 76%.
| Price Change % | Year | 3 Years |
| Banco do Brasil | 28.6 | 95.5 |
| Bank sector | 5.8 | 17.7 |
| Bovespa Index | 3.8 | 19.5 |
5.5 Created Market Value [CMV] past 14 yrs of R$43.6 billion ($8.8 billion)
- Market Capitalization has increased by R$48.6 billion from R$84.4 billion to R$133 billion in the last 14 years. This increase comprises cumulative retained earnings (RETE) of R$5 billion and Created Market Value of R$43.6 billion. The Created Market Value multiple, defined by the change in MCap for every R$1 of retained earnings is exemplary at R$9.78.
5.6 Annualised Period-based Total Shareholder Returns [TSR %]: The Best Periods with TSR > 18.1%
| TSR % | 1 yr | 3 yrs | 5 yrs | 10 yrs |
| BBAS3.SA | 46.3 | 37.5 | 27.2 | 18.2 |
5.7 Increased Volume, up 20% in 5 years
In the past five years, Average Daily Volume of Trading (ADVT) has increased 20.3% to 13.2 million shares.
Avg. Daily Volume Traded 12 months ended Sep 25, million shares
| Year | ADVT |
| 2023 | 13.2 |
| 2022 | 13.6 |
| 2021 | 15.4 |
| 2020 | 16.1 |
| 2019 | 11.0 |
5.8 Increased VWAP, up 15% in 5 years
In the past five years Volume Weighted Average Price (VWAP) has increased by 15.1% to R$38.58. Based on a dynamic start date of five years ago, there have been declines in VWAP in 3 out of 5 years.
Past five years, 12 months ended Sep 25 (BRL)
| Year | High Price | VWAP | Low Price |
| 2023 | 50.76 | 38.58 | 28.0 |
| 2022 | 38.04 | 29.33 | 22.68 |
| 2021 | 31.52 | 25.34 | 21.32 |
| 2020 | 40.32 | 27.22 | 16.6 |
| 2019 | 40.55 | 33.53 | 19.76 |
5.9 Increased share turnover, up 41% in 5 years
In the past five years, average daily share turnover has increased 40.7% to R$509.2 million ($103.2 million). This suggests increased liquidity.
Past five years, 12 months ended Sep 25 (BRL million)
| Year | Average Daily Turnover |
| 2023 | 509.2 |
| 2022 | 397.2 |
| 2021 | 383.4 |
| 2020 | 435.6 |
| 2019 | 361.9 |
5.10 Satisfies 5 out of 9 criteria of Joseph Piotroski [pass mark 5]:
- Positive net income.
- Positive operating cashflow.
- Return on Assets improvement [from 1% to 1.5%].
- Good quality of earnings [operating cashflow exceeds net income].
- Improvement in asset turnover [growth in revenue of 81.3% exceeded growth in assets of 5%].
But does not meet the following 4 criteria of Joseph Piotroski:
- Improvement in long-term debt to total assets.
- Improvement in current ratio.
- Total shares on issue unchanged (or reduction in total shares on issue).
- Improvement in gross margin.
SECTION 6 CORPORATE PROFILE
6.1 Activities
Banco do Brasil S.A. attracts deposits and offers retail and commercial banking services. The Bank offers consumer, commercial, and agribusiness loans, asset management, foreign exchange, private pension, insurance, lease financing, credit cards, and Internet banking services. It is Brazil's largest Bank by market capitalisation.
6.2 Contact Details
| Website | http://WWW.BB.COM.BR |
| Physical Address | SBS Q-4 Bloco 3 Lote 32 Plano Piloto Brasilia, DF 70089-900 Brazil |
| Phone | (21)3808 3715 |
| Fax | (21)3808 3466 |
| ri@bb.com.br |
6.3 Industry & Sector [of 91 stocks]
| Classification Level | Name of Sector |
| Economic Sector | Financials |
| Business Sector | Banking & Investment Services |
| Industry Group | Banking Services |
| Industry | Banks |
SECTION 7 BANK METRICS
7.1 Bank Metrics (Q2/2023)
All values are in R$ billion
| Description | Q2/2023 | Q2/2022 | Change |
| Provision | 8.6 | 4.6 | Up 87.5% |
| Total Non Interest Income | 13.7 | 14.8 | Down 7.4% |
| Total Non Interest Expense | 16.6 | 15.4 | Up 7.7% |
| Total Deposits | 802.1 | 747.9 | Up 7.2% |
| Net Loans | 867.4 | 766.2 | Up 13.2% |
Favourable Changes:
- Total Deposits up 7.2% from R$747.9b to R$802.1b
- Net Loans up 13.2% from R$766.2b to R$867.4b
Unfavourable Changes:
- Provision up 87.5% from R$4.6b to R$8.6b
- Total Non Interest Income down 7.4% from R$14.8b to R$13.7b
- Total Non Interest Expense up 7.7% from R$15.4b to R$16.6b
APPENDIX I DATA & ARCHIVE DOWNLOAD CENTER
BBAS3: EXCEL TABLES ARE AVAILABLE TO EXPORT DATA:
+ PRICE VOLUME - 5-YEAR HISTORY
+ PEER COMPARISON - STOCK IN BANK SECTOR AND STOCK IN INDICES
BBAS3: LINKS IN HTML TO FURTHER INFORMATION:
+ NEWS ARCHIVES - BBAS3 PAST 4 YEARS IN HTML:
+ USD vs BRL EXCHANGE RATE CHARTS IN HTML
APPENDIX II STOCK IDENTIFIERS
ISIN: BRBBASACNOR3
PermID: 4295859896
RIC: BBAS3.SA
GLOSSARY
ADVT: Average Daily Volume of shares Traded
Annual Return: Dividends Paid In a 12-Month Period/Price at the Beginning of the Period + Capital Gain or Loss over 1 Year/Price 1 Year Ago (%)
Banks Non-interest Income to Total Income: Non-Interest Income (Loan fees etc)/Total Income (Net Interest Income + Non-Interest Income)
Current Ratio: Current Assets/Current Liabilities (times)
Dividend Yield: Dividend Per Share/Share Price (%)
Income during the n years (3/2/1): Dividends received during the Period
Moving Average Price (n periods): Sum of Prices for each Period/Number of Periods
PCP: Previous Corresponding Period
PV1000: Present value of 1000 invested 1 year/'n' years ago
Price Close/Moving Avg Price: Latest Price/Moving Average Price
Relative Price Change [RPC]: Relative price change is price change of stock with respect to Benchmark Index
Relative Strength (6 Months): Price close today/Price close 6 months ago, then ranked by percentile within the entire market.
Return on Assets: Net Profit/Total Assets (%)
Return on Equity (Shareholders' Funds): Net Profit/Net Assets (%)
TSR: Total Shareholder Returns is expressed as an annualized rate of return for shareholders after allowing for capital appreciation and dividend
Volume Weighted Average Price (VWAP): The Volume Weighted Average Price (VWAP) is the summation of turnover divided by total volume in the same period.
Disclaimer: While this document is based on information sources which are considered reliable, it has been prepared without consideration of your specific investment objectives, financial situation or needs, so you should carry out your own analysis or seek professional investment advice before an investment decision is made. The document contains unbiased, independent equities data and analysis from Jupiter International (Australia) Pty Ltd trading as BuySellSignals (AFS Licence 222756), who provide round the clock analysis on every stock, every sector, every market, every day. BuySellSignals is not a broker, and does not have executing, corporate advisory or investment banking functions. Jupiter International (Australia) Pty Ltd, its directors, employees and contractors do not represent, warrant or guarantee, expressly or impliedly, that the information contained in this document is complete or accurate.
Data for the BuySellSignals algorithms is drawn from annual reports, company websites and similar sources of publicly available data. It should be used as a guide only.
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