ITUB
Itaú Unibanco Holding S.A.
$8.31
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 29.4% below fair value
You pay
$8.31
Bear
$11.46
Fair
$11.77
Bull
$15.30
Bear
$11.46
+37.9%
ROTCE 18.7% → 4.00x TBV
Fair
$11.77
+41.7%
ROTCE 24.9% → 4.00x TBV
Bull
$15.30
+84.1%
ROTCE 28.6% → 4.00x TBV
Key Value Driver
ROTCE (24.9%) vs. cost of equity (6.0%)
Implied Market Multiple
2.6x
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 13 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $11.77 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 13 analysts). Our estimate is 106% above the consensus -- consider that gap carefully.
Financial statements were converted from BRL into USD using USDBRL at 0.1951 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