ITUB
Itaú Unibanco Holding S.A.
$7.82
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 34.8% below fair value
You pay
$7.82
Bear
$11.68
Fair
$12.00
Bull
$15.59
Bear
$11.68
+49.4%
ROTCE 18.7% → 4.00x TBV
Fair
$12.00
+53.4%
ROTCE 24.9% → 4.00x TBV
Bull
$15.59
+99.4%
ROTCE 28.6% → 4.00x TBV
Key Value Driver
ROTCE (24.9%) vs. cost of equity (6.0%)
Implied Market Multiple
2.4x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $6.38 from 12 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $12.00 per share.
Warnings
Traditional cash flow models don't work well for banks — lending activity distorts how much cash the business actually generates.
Common valuation shortcuts don't apply here — for banks, interest payments are a core business cost, not overhead.
Wall Street's average price target is $6.38 (from 12 analysts). Our estimate is 110% above the consensus -- consider that gap carefully.
Financial statements were converted from BRL into USD using USDBRL at 0.1993 USD per BRL.
Key Risks
- Book value quality matters as much as level — check loan loss reserves
- Interest rate sensitivity creates non-linear earnings surprises
- Insurance reserving is actuarial, not financial — errors emerge slowly