ITUB · Itau Unibanco Holding

The thesis

Itaú Unibanco's third-quarter report removed the earnings worry but not the country worry. The bank earned a 23.6% return on equity, in line with forecasts, yet its US shares closed at $7.39 on 10 November 2026, level with the $7.40 close of 28 October 2026. Brazil's fiscal outlook under President Lula's second term, and the fourth-quarter report, settle whether the shares recover.

A return on equity (ROE, annual profit as a share of shareholder equity) of 22% was the threshold for the 3 November 2026 report. The bank reported 23.6%, so that condition did not fire. The shares did not rally on the news either, and the 14-day relative strength index (RSI, a 0-to-100 momentum gauge) was 19.4 on 10 November 2026, still below the 30 line usually read as oversold.

The election-premium narrative is dead: Lula won the 25 October 2026 runoff and the shares fell 23.78% on 26 October 2026 (Benzinga Pro data via Benzinga). The country-risk narrative is maturing: it is well known, and the shares have moved sideways since 28 October 2026 despite an in-line report.

Bullish and bearish views on Itau Unibanco Holding S.A.

The bull case on Itau Unibanco Holding S.A. (ITUB), in brief: earnings held up. The bear case: ROE slipped. ROE fell 0.7 percentage points from 24.3% in the second quarter, and Brazil operations fell to 24.5% from 25.7% (Investidor10, Forbes Brasil). Fee income is flat. Fee income was R$11 billion, down 0.1% from a year earlier (Forbes Brasil). Itaú cut its full-year fee…

Bull case

• Earnings held up. Itaú reported a third-quarter recurring managerial result of R$12.617 billion on 3 November 2026, up 6.2% from a year earlier and 1.7% from the second quarter (Investidor10). Nine-month profit was R$37.3 billion, up 8.1% year on year.
• Returns stay near 24%. ROE was 23.6%, against 23.3% a year earlier and a 23.4% consensus from LSEG (Forbes Brasil, 4 November 2026). Brazil operations posted 24.5%.
• Guidance was reaffirmed. Itaú kept nearly all its 2026 projections, including cost of credit of R$38.5 billion to R$43.5 billion. The one change cut the expected effective tax rate to 28%–29% from 29.5%–32.5% (Forbes Brasil, 4 November 2026).
• Lending is growing. The expanded credit portfolio reached about R$1.54 trillion, up 10.2% year on year and 1.4% on the quarter (Investidor10). Net interest income was R$34.6 billion, up 7.8% year on year.
• Costs are controlled. The efficiency ratio, which divides costs by revenue, was 37.5%, against 38.8% a year earlier. Per-share earnings of $0.22 matched forecasts and revenue of $9.563 billion beat the $9.530 billion estimate (Benzinga, 3 November 2026).

Bear case

• ROE slipped. ROE fell 0.7 percentage points from 24.3% in the second quarter, and Brazil operations fell to 24.5% from 25.7% (Investidor10, Forbes Brasil).
• Fee income is flat. Fee income was R$11 billion, down 0.1% from a year earlier (Forbes Brasil). Itaú cut its full-year fee and insurance growth guidance to 2%–5% from 5%–9% in August 2026 (MarketBeat).
• Small-business credit is weakening. The 90-day delinquency ratio rose to 2.0% from 1.9%, which Investidor10 links mainly to small and medium business loans as government-program grace periods ended. Cost of credit was R$10.4 billion, up 10.2% year on year.
• Capital is thinner. The core capital ratio (CET1) was 12.7%, against 13.5% a year earlier (Forbes Brasil).
• The country discount persists. Trading Economics reported on 28 October 2026 that Morgan Stanley and Citi downgraded Brazilian assets and that the Ibovespa had closed near 171,006, its lowest in about two months. Santander's Brazilian unit reported a 28% year-on-year fall in recurring net income the same day.

Price setup

The shares closed at $7.39 on 10 November 2026 in split- and dividend-adjusted daily closes. The 52-week high is $10.16, so the shares sit 27.3% below it. The shares are up 0.8% over three months, a figure that includes the 5 October 2026 first-round rally and the 26 October 2026 collapse.

The 28 October 2026 close was $7.40, so the shares have moved sideways for about two weeks. They held that range through the 3 November 2026 results and the 4 November 2026 analyst meeting.

The ADR (American depositary receipt, the US-listed form of the shares) also carries Brazilian real moves, so it can diverge from the local B3 listing. Analyst targets seen in news are from before the election: Goldman Sachs raised its target to $10.5 on 9 October 2026 and HSBC downgraded to Hold with a $9.1 target on 8 October 2026 (Benzinga). Crowding looks low: the sharp one-day drop and the RSI of 19.4 point to forced selling, not heavy new buying.

Catalysts ahead

• ~9 December 2026 (est.): Central Bank of Brazil interest-rate decision, December meeting (date unconfirmed). The rate path shapes bank lending margins and the real's exchange rate, which both feed into the ADR.
• Not announced: Lula names his economic team for the second term. Trading Economics tied the late-October losses partly to uncertainty over who will run economic policy.
• Not announced: CADE and central bank approvals for the R$2.925 billion NeoSpace acquisition. Clearance decides whether the AI acquisition closes on the terms announced on 26 October 2026.

What would change the view

A daily close above $8.48, the 50-day average of closes (11 November 2026), would show the shares leading the S&P 500 and prove this call wrong.

What it trades with

The ADR moves with Brazil's political and fiscal news, the Ibovespa, the real and emerging-market flows more than with US bank stocks. XP and StoneCo, both Brazilian financials, rallied 17.2% and 16.33% in pre-market trading on 5 October 2026 after the first round (Benzinga), so they react to the same election news.

Itaú reports in reais, so a weaker real lowers the dollar value of earnings. The ADR can diverge from the B3 listing in either direction.