ITUB - Itau Unibanco Underappreciated On Its Leverage To Higher Rates And Strong Loan Demand

March, 11 2022 06:06 PM Itau Unibanco Banco Holding SA American Depositary Shares

Itau beat expectations in Q4'21 and management guided to strong loan growth in '22 and very strong net interest income growth, but the market seems, at best, skeptical.
I do see some macro risk to loan demand in Brazil in 2022 from higher costs (energy in particular) and weaker industrial output.
Credit quality is not really an issue anymore and Itau's strong presence in credit cards and revolving lines of credit gives it strong leverage to higher rates.
Even with a long-term earnings growth and ROE expectations below management and sell-side targets, Itau shares look 15% to 25% undervalued today.

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Company Name:	Itau Unibanco Banco Holding SA American Depositary Shares
Stock Symbol:	ITUB
Market:	NYSE
Website:	itau.com.br