Higher-than-expected first-quarter earnings at BB Seguridade
Participações SA is likely to drive a round of
earnings estimate upgrades among analysts covering the stock,
analysts at Grupo BTG Pactual led by Eduardo Rosman said in a
Tuesday note. BB Seguridade, the Brasilia-based insurance
holding company controlled by state-run Banco do Brasil SA
, earned 648.7 million reais ($291 million) in net
income in the first quarter, above the 633 million reais
estimate in a Reuters poll of four analysts.
Even as management at BB Seguridade reiterated their
guidance for the year, and there are downside risks for the
BrasilPrev retirement unit, "we see upside risks to consensus in
2014," Rosman and his team wrote. He has a 12-month price target
of 27 reais a share, compared with trading levels of 27.59 reais
on late Tuesday afternoon.
"We remain upbeat on BB Seguridade and reiterate our 'buy'
recommendation as we believe selling insurance will remain a top
priority at Banco do Brasil branches," Rosman wrote in the note.
Currently, BB Seguridade, alongside card payment processor Cielo
SA are BTG Pactual's top picks among financial and
banking shares in Brazil.
($1 = 2.23 Brazilian reais)
(Editing by Meredith Mazzilli)