Investor relations, firm visibility, and investor following: Itau Unibanco Holding S.A. (NYSE:ITUB)

Itau Unibanco Holding S.A.’s ITUB local currency issuer rating at Ba3 along with the senior and subordinated debt ratings have been affirmed by Moody’s Investors Service. The outlook on the company’s ratings has remained stable.

Further, the ratings agency has affirmed long-term local currency deposit rating at Ba2, long-term foreign currency deposit rating at Ba3 and the Brazilian national scale deposit rating at Aa1.br for Itau Unibanco’s banking subsidiary, Itau Unibanco S.A. Also, the bank’s ba2 standalone baseline credit assessment (“BCA”) has been reiterated.

Ratings Rationale

The subsidiary’s ba2 BCA affirmation is reflective of the bank’s fundamental credit strengths, which include a solid balance sheet, reflecting its large but low-cost funding base, ample liquidity, stable asset quality and adequate capitalization. Also, its efficient risk management profile supports asset quality performance through the cycle, while its broad franchise provides ample access to funding and liquidity.

Moody’s rating action also takes into account expectations that asset quality and profitability might decline because of the coronavirus outbreak-induced mayhem. Also, the subsidiary’s capitalization is a relative credit weakness but the rating agency expects it to improve in the coming quarters.

Moody’s is concerned that record-low interest rates and strengthening competition in some of its core businesses might affect its earnings resilience under more challenging operating conditions, including reduced business activity and higher credit provisions.

Per management, due to uncertainties about the length and depth of the economic slowdown and recovery, it is difficult to assess whether year-to-date loss provisions will be sufficient to absorb the coming credit losses. Additional substantial provisions might hurt profitability and result in reduced internal capital generation capacity.

Also, Moody’s is of opinion that given the bank’s sizable market share of 20.9% of system deposits as of March 2020, a high level of government support is expected. Yet, this provides no incentive for a rating upgrade, as Itau’s BCA is already at the same level as Brazil’s Ba2 sovereign rating.

On 08-28-2k20 (Friday) Shareholders tracking shares of Itau Unibanco Holding S.A. (ITUB) belongs to Financial sector and Banks – Regional industry. ITUB flaunted 4.19% to reach at $4.48 during previous trading session. ITUB Inc. has a total market value of 43.72B at the time of writing – representing $9.76B outstanding shares. Turning to other widely-considered trading data, this company’s half yearly performance is observed at -37.02%.

Volume Evaluation

The Brazil listed company saw a recent price trade of $4.48 and 121,697,727 shares have traded hands in the session. There are 28.34M shares which are traded as an average over the last three months period.

Many investors forget that one of the defining characteristics of the stock market is that it’s a market. Buyers and sellers help determine the price of each stock, and the more buyers and sellers a particular stock has interested in it, the more liquid the market will be. Liquidity can have a profound impact on just how violently stock prices can move in either direction, and the reasons have to do with the nature of the market in a stock’s shares.

Trading volume, or volume, is the number of shares or contracts that indicates the overall activity of a security or market for a given period. Trading volume is an important technical indicator an investor uses to confirm a trend or trend reversal. Volume gives an investor an idea of the price action of a security and whether they should buy or sell the security.

Performance Levels

Looking performance record on shares of Itau Unibanco Holding S.A. (ITUB) we observed that the stock has seen a move -44.59% over the last 52-week trading period. The stock generated performance of 2.28% tracking last 3 months. Investors will be anxiously watching to see if things will turn around and the stock will start gaining or losing momentum over the next few months. If we look back year-to-date, the stock has performed -50.10%. Shares are at 5.16% over the previous week and -16.54% over the past month.

Analyst Views:

Fluctuating the focus to what the Wall Street analysts are projecting, we can see that the current consensus target price on shares is $6.48. Analysts often put in a lot of work to study stocks that they cover. Wall Street analysts have a consensus recommendation of 2.80on this stock. This number falls on a one to five scale where a 1 would be considered a strong buy and 5 means a strong sell, 2 shows Buy, 3 Hold, 4 reveals Sell recommendation.

Volatility Insights

Watching some historical volatility numbers on shares of Itau Unibanco Holding S.A. (ITUB) we can see that the 30 days volatility is presently 3.62%. The 7 days volatility is 3.17%. Following volatility data can help measure how much the stock price has fluctuated over the specified time period. Although past volatility action may help project future stock volatility, it may also be vastly different when taking into account other factors that may be driving price action during the measured time period.

The company has a beta of 0.85. 1.00 indicates that its price is correlated with the market. Less than 1.00 shows less volatility than the market. Beta greater than 1.00 indicates that the security’s price is theoretically more volatile than the market.

The Average True Range (ATR) value reported at 0.18. The average true range (ATR) is a technical analysis indicator that measures volatility by decomposing the entire range of an asset price for that period. A stock experiencing a high level of volatility has a higher ATR, and a low volatility stock has a lower ATR. The ATR may be used by market technicians to enter and exit trades, and it is a useful tool to add to a trading system. It was created to allow traders to more accurately measure the daily volatility of an asset by using simple calculations. The indicator does not indicate the price direction; rather it is used primarily to measure volatility caused by gaps and limit up or down moves. The ATR is fairly simple to calculate and only needs historical price data.

Technical Considerations

Itau Unibanco Holding S.A. (ITUB) stock positioned -25.20% distance from the 200-day MA and stock price situated -7.92% away from the 50-day MA while located -1.84% off of the 20-day MA.

RSI value sited with reading of 54.55. Relative Strength Index (RSI) is an extremely useful and popular momentum oscillator. The RSI compares the magnitude of a stock’s recent gains to the magnitude of its recent losses and turns that information into a number that ranges from 0 to 100. It takes a single parameter, the number of time periods to use in the calculation. In his book, Wilder recommends using 14 periods.

Observing the Technical Indicators:

Itau Unibanco Holding S.A. institutional ownership is held at 22.90% while insider ownership was 52.10%. As of now, ITUB has a P/S, P/E and P/B values of 1.75, 12.84 and 1.84 respectively. Its P/Cash is valued at 0.24. The Company’s net profit margin for the 12 months at 0. Comparatively, the gazes have a Gross margin N/A.

Profitability ratios:

Looking into the profitability ratios of ITUB stock, an investor will find its ROE, ROA, ROI standing at 14.40%, 1.10% and 6.30%, respectively.

Earnings per Share Details of Itau Unibanco Holding S.A.:

The EPS of ITUB is strolling at 0.35, measuring its EPS growth this year at 8.70%. As a result, the company has an EPS growth of 9.30% for the approaching year.

Given the importance of identifying companies that will ensure earnings per share at a tall rate, we later obsession to umpire how to identify which companies will achieve high amassing rates. One obvious showing off to identify high earnings per portion count together companies are to locate companies that have demonstrated such build up beyond the p.s. 5 to 10 years.

The payout ratio shows the proportion of earnings paid out as dividends to shareholders, typically expressed as a percentage of the company’s earnings. The payout ratio can also be expressed as dividends paid out as a proportion of cash flow. The payout ratio is also known as the dividend payout ratio. The Company’s payout ratio was 976.70% and Price to free cash flow remained $3.14.

Jessica Wilson
About Jessica Wilson 15 Articles
I am Jessica Wilson Senior News Writer for alphafinews.com. I covers Financial sector and writes about hot Financial companies from an exclusive and “out of the box” perspective. Over the 7 years, I have built a network of resources within the financial sector I writes about. I hold MS degree in the field of Finance. My most recent work incorporates a promoting article on the portable site plan that objectives organizations hoping to make their sites amicable to versatile clients. The greater part of my articles mixes some type of examination with the composition process itself. I work on a full-time basis for Alpha Finews Update specializing in quicker moving active shares with a short-term view on investment opportunities and trends. I have been active in the markets for some years, and I mainly focused on long/short equities. Exceptionally qualified Senior Business Writer with over seven years of showed involvement in marketable strategies and awards.