Get 40% Off
⚠ Earnings Alert! Which stocks are poised to surge?
See the stocks on our ProPicks radar. These strategies gained 19.7% year-to-date.
Unlock full list

Moody's Downgrades Brazil Banks On Nation's Negative Stance

Published 06/01/2017, 08:57 AM
Updated 07/09/2023, 06:31 AM

Moody's Investors Service, the rating services arm of Moody's Corporation (NYSE:MCO) , downgraded outlooks assigned to 19 Brazilian banks, and the Brazilian stock and futures exchange – BM&FBovespa S.A – to negative from stable. The change in outlook followed the downgrade of Brazil's Ba2 government bond rating to negative from stable, last week. However, affected issuers' ratings and assessments were affirmed by Moody’s.

The outlook was revised by Moody’s on local currency deposit and/or foreign currency senior unsecured debt ratings of 15 domestically-owned banks having the same rating as of Brazil's sovereign rating. Moreover, outlook for four foreign-owned banks and BM&FBovespa was revised having rating above the sovereign rating.

Itau Unibanco Holding S.A. (NYSE:ITUB) , Banco Bradesco S.A. (NYSE:BBDO) , Banco do Brasil S.A. (OTC:BDORY) and Banco Santander (MC:SAN) (Brasil) S.A. (NYSE:BSBR) are among the 19 banks, outlooks of which were lowered by Moody's. Among these, Itau Unibanco carries a Zacks Rank #3 (Hold), while Banco Santander has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

This move comes on the heels of the country's deteriorating macroeconomic and political environment. It also reflects the lack of progress made by the government in achieving its fiscal and economic reform objectives. Further, slowdown in the Brazilian economic recovery will impact borrowers' repayment capacity, thereby increasing risks for the nation’s banks.

Rating outlook is valuable for banks since these preserve investors’ confidence in the stock and boost its creditworthiness in the market. However, a downgrade in the same brings down investors’ confidence, as well as underlines the company’s weak financials.

Looking for Stocks with Skyrocketing Upside?

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.

Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.

See the pot trades we're targeting>>



Moody's Corporation (MCO): Free Stock Analysis Report

Itau Unibanco Banco Holding SA (ITUB): Free Stock Analysis Report

Banco Santander Brasil SA (BSBR): Free Stock Analysis Report

Original post

Zacks Investment Research

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.