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On Wednesday, Citi analyst Rafael Frade upgraded Banco Bradesco SA (BBDC4:BZ) (NYSE:BBD) stock from Neutral to Buy, while also increasing the price target to R$19.50, up from the previous R$13.60. The upgrade reflects a positive outlook for the bank’s return on equity (ROE) and its potential for revenue growth and cost discipline in the coming years.
Frade noted the reasons behind the upgrade, stating, "We are upgrading BBDC to Buy from Neutral (High Risk). We see drivers for BBDC’s ROE improvements both in the short and mid-term." He anticipates that for the remainder of 2025, the bank’s risk-adjusted revenues should continue to improve on a quarterly basis. Looking further ahead, he expects cost discipline to increasingly influence the bank’s financial outcomes through operating leverage.
The Citi analyst projects that Banco Bradesco’s sustainable ROE will reach 16.5% by the fourth quarter of 2026. This anticipated improvement is expected to facilitate a re-rating of the bank’s stock and mitigate concerns regarding the bank’s capital position.
Frade’s upgrade and the new price target indicate a significant increase in confidence in Banco Bradesco’s financial strategy and performance prospects. The bank’s focus on revenue improvement and cost management appears to be aligning with Citi’s criteria for a Buy rating, suggesting a potentially strong performance for Banco Bradesco in the near to medium term.
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