See the stocks most recommended by banks and brokerages for the month of January

The first month of 2023 is seen as a period of repositioning and attention to updates from the new government, according to the main analysts in the country. Therefore, the portfolio of recommended actions for the month of January has some changes in relation to the month of December.

Petrobras, for example, left the portfolio, with investors eyeing the new government’s plans for the state-owned company, under the command of lawyer and economist Jean Paul Prates, appointed to the presidency last month.

Vale (VALE3) is again in the lead among the companies with the shares most recommended by banks and brokerages, but had a decrease in preference, after some houses removed the mining company’s share from their top picks due to the uncertainties of China’s reopening policy and the impacts on the price of iron ore.

Sharing the top of the list with Vale is the role of Itaú Unibanco (ITUB4), with six recommendations. Close behind are PetroRio (PRIO3) and Hypera Pharma (HYPE3), with five nominations each.

The composition of the portfolio included indications from some of the main banks and investment brokerages in Brazil. They are: Inter, XP, BTG Pactual, Santander, Banco do Brasil, Guide, Warren, Órama, Terra, ModalMais, CM Capital and Ativa.

See the complete list below:

Highlights of the month

See what analysts commented on the most recommended stocks for January:

Itau

Ticker: ITUB4

Comment: Guide

In the 3rd quarter of 2022, Itaú Unibanco’s net income grew 6% per year, reaching R$7.882 billion, slightly above our estimates of R$7.880 billion. The margin with customers increased by 6.4% compared to the previous year, driven mainly by the 2.5% y/y growth in the loan portfolio and by the growth of the average annualized rate, reaching 5.6%.

The 20.6% reduction in the financial margin with the market in the quarter was due to lower gains in treasury in Latin America. Due to the greater volume of credit recovered, expenses with PDD were 2.6% above the previous quarter.

The NPL ratio over 90 days (NPL 90) increased 10 bps from the previous quarter, reaching 2.82%, 2 bps above our estimates. The increase is related to the portfolios of individuals and micro, small and medium-sized companies in Brazil. The coverage ratio remained stable, increasing only 3 pp from the previous quarter.

OK

Ticker: VOUCH3

Comment: BTG Pactual

“The company remains one of our preferred names for exposure to the reopening of the Chinese economy. As we move into 2023, we expect economic activity to gradually recover as the government eases restrictions and helps moderate the housing market correction. from a perspective bottom-upits operating momentum should continue to recover as production and costs (both for its iron ore and base metals divisions) should improve in the coming quarters.

We welcome the addition of a reference shareholder (Cosan) to Vale’s board and see a potential monetization of the base metals division as a potential value generator for long-term investors.

In our opinion, management remains highly disciplined in its capital allocation strategy (low growth capex), and we expect most of the mid-term strategic agenda to be focused on shareholders’ cash returns – we project a yield of 10- 11% to 2023, including share buybacks. We reiterate our purchase recommendation.”

PetroRio

Ticker: PRIO3

Comment: XP Investimentos

“PRIO developed intense M&A activity, acquiring Manati, Frade, Tubarão Martelo, Wahoo, Itaipu and, more recently, Albacora Leste, becoming one of the largest O&G producers in Brazil. PRIO’s shares have risen aggressively in recent years, supported not only by the massive increase in O&G production, but also by cost reductions and improved cash generation. Looking ahead, inorganic growth and royalty reduction are positive points that are not in our numbers.

Production is expected to more than double in the coming years, driven by the acquisition of Albacora Leste and the development of Wahoo. We see PRIO as the best Brazilian O&G Jr, to continue growing with high returns for the coming years. We mapped several assets close to the current PRIO fields, providing many M&A opportunities in the short, medium and long term.”

Hypera Pharma

Ticker: HYPE3

Comment: Santander

“We believe that the pharmaceutical segment will be one of the most resilient within our healthcare coverage to face the uncertainties related to the macroeconomic environment in 2023. We expect Hypera’s revenue to be driven by acquisitions and the launch of new products.

In addition to its strong organic growth (+12% pa expected in 2022), we expect the consolidation of the Sanofi acquisition and the launch of products in recently acquired brands (eg Takeda and Buscopan) to further increase revenue growth. In total, we expect them to reach BRL 7 billion, +18% y/y, in 2022.

Thus, we project an EBITDA margin expansion of 110 bps per year.”