Itaú Unibanco: Execution Still Justifies The Premium

Bernard Zambonin1.64K FollowersFollow5ShareSavePlay(9min)CommentsSummaryItaú Unibanco continues to deliver 20%+ ROE through disciplined credit growth and superior execution, widening the gap to domestic incumbent peers.FY25 reinforced the story, with higher profitability, improving efficiency, and stable credit metrics despite a still restrictive macro.FY26 guidance appears conservative, but underlying trends suggest earnings growth can remain resilient even with a higher base.While the stock trades at a premium P/B, the market is pricing in sustained high ROE, making execution the key to justifying the valuation. Joa_Souza/iStock Unreleased via Getty Images The fact that São Paulo–based Itaú Unibanco (ITUB) is a rare case of an incumbent bank in emerging markets that consistently delivers 20%+ ROE across cycles pretty much sums up the investment thesis. InThis article was written byBernard Zambonin1.64K FollowersFollowEquity Research Analyst at DM Martins Research.I cover stocks that are often undercovered, focusing primarily on Brazil and Latin America — but I also occasionally write about global large caps. My work can also be found on TipRanks, where I contribute regularly, and on TheStreet, where I was a frequent contributor in the past.- Disclaimer: All views expressed here are my own and do not necessarily reflect the views or official positions of DM Martins Research. My articles and analyses are for educational and informational purposes only and should not be taken as investment advice. Always do your own due diligence before making any investment decisions.Analyst’s Disclosure: I/we have a beneficial long position in the shares of ITUB either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.