Banco Itau (ITUB) Moves to Strong Buy: Rationale Behind the Upgrade

Core Viewpoint - Banco Itau (ITUB) has received an upgrade to a Zacks Rank 1 (Strong Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Performance - The Zacks rating system tracks the Zacks Consensus Estimate, which reflects EPS estimates from sell-side analysts for the current and following years, highlighting the importance of earnings revisions in stock price movements [1][4]. - A strong correlation exists between changes in earnings estimates and near-term stock price movements, with institutional investors using these estimates to determine fair value [4][6]. Recent Developments for Banco Itau - Banco Itau's earnings estimates have been rising, with a 3.7% increase in the Zacks Consensus Estimate over the past three months, projecting earnings of $0.76 per share for the fiscal year ending December 2025, indicating no year-over-year change [8][5]. - The upgrade to Zacks Rank 1 places Banco Itau in the top 5% of Zacks-covered stocks, suggesting potential for higher stock prices in the near term due to improved earnings outlook [10][9]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988, demonstrating the effectiveness of this rating system [7][9].