http://www.businessweek.com/news/2013-08-29/banco-do-brasil-rallies-after-jpmorgan-says-buy-sao-paulo-mover

Bloomberg News

Banco do Brasil Rallies After JPMorgan Says Buy: Sao Paulo Mover

August 29, 2013

Banco do Brasil SA, Latin America’s biggest lender by assets, rose after JPMorgan Chase & Co. (JPM:US) recommended buying the stock, saying investors are overestimating the state-controlled bank’s risk.

The shares gained 3.4 percent to 22.84 reais at 1:19 p.m. in Sao Paulo, the biggest advance on a closing basis since Aug. 22. The rally was the biggest on the MSCI Brazil/Financials index, which added 1.4 percent.

JPMorgan initiated coverage of Banco do Brasil with an overweight recommendation, saying today in a research note that concern over the government’s demand that the Brasilia-based lender increase financing to spur economic growth is exaggerated. JPMorgan set a 2014 target price of 28 reais.

“We see the risk to reward profile as asymmetrically positive at current very depressed valuation,” Saul Martinez, Domingos Falavina and Christopher Delgado, analysts at JPMorgan, wrote in the research note.

Banco do Brasil’s shares trade at 6.1 times Banco do Brasil’s estimated earnings for 2014, the lowest ratio among Latin American banks that JPMorgan covers, the firm said in the research note.

To contact the reporter on this story: Denyse Godoy in Sao Paulo at dgodoy2@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net


Burger King's Young Buns
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus