See the most recommended stocks by banks and brokers for the month of October

The composition of the recommended stock portfolio for October CNN Brasil Business counted on the nominations of some of the main banks and investment brokers in Brazil. They are: XP, Banco do Brasil, Órama, Guide, Santander, Warren, Ativa, Terra, ModalMais, CM Capital and Guide.

Vale once again followed as the most recommended action, with nine suggestions in total. The asset of mining company VALE3 was followed by ITUB4, from Itaú Unibanco, which had 7 recommendations, and by ASAI3, from wholesaler Assaí, with 4 nominations.

Highlights for the month

Find out what analysts said about the top three stocks for October:

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Action: VALE3

Comment: Santander

“We believe that Vale is well positioned within the global iron ore industry, its most important division. We expect demand for high quality iron ore to remain decent in the short term, benefiting the company due to the increase in the S11D project (located in the municipality of Canaã dos Carajás, in southeastern Pará), which increased the supply of the higher quality commodity of the company.

Despite the recent bump in iron ore in the international market, we maintain our positive view on commodity prices in the medium term, as our thesis is guided by supply constraint, given that persistent supply challenges (for example, ramp-up up from Vale, ESG highlighted, lack of new projects, among others) should sustain iron ore prices above US$100/t for longer”.

Itaú Unibanco

Action: ITUB4

Comment: XP

“In September, the shares of Itaú Unibanco (ITUB4) rose again, completing the third consecutive month of rise. In September, the shares appreciated by 6.7%, above the IBOV and IFNC (-1.0% and +1.9% in the same period, respectively). We attribute this performance to the strong results reported throughout the year, which culminated in the upward revision of the guidance for the year.

Furthermore, we see the following differentials: i) we see Itaú with a very healthy coverage ratio (and above the historical average) while keeping delinquency rates under control; ii) it has a good exposure to consumer credit lines, which are growing rapidly; iii) solid track record in M&As and partnerships; iv) attractive valuation. We have a Buy recommendation and target price of BRL 31.0/share for the end of 2022”.

assaí

Action: ASAI3

Comment: Guide

“Assaí had a CAGR of 21% between 2016 and 2021, and has positive prospects, such as the opening of 12 new organic stores in 2022 and the conversion of the Extra-Hiper stores acquired from GPA, with the delivery of 40 stores expected for the second half of this year. The group reported solid results in the 2nd quarter of 2022, with strong net revenue growth of 32.8% and SSS of 14.7%, which mainly reflects the higher demand for the Wholesale channel due to the challenging macroeconomic scenario, in addition to the return of B2B customers, good sales performance on commemorative dates and strong contribution from organic expansion in the last 12 months, with the opening of 32 new stores.

There was a notable gain in market share, good control of expenses, in addition to an improvement in the Ebitda margin, unlike competitors, showing its superior operational efficiency. Net income reached R$319 million, 21% higher than in 2Q21, with a net margin of 2.4%. In the first half of the year, net income totaled R$533 million due to the high operating leverage that largely offsets the context of high interest rates”.