Investing.com - Itau BBA reiterated an Outperform rating on Banco Bradesco S.A. (NYSE:BBD) following the bank's announcement of a healthcare operations spin-off.
Bradesco announced Friday before markets opened that it will transfer its healthcare insurance operations into its listed dental insurance company, OdontoPrev (ODPV). The bank will exchange its healthcare business for 2.4 million newly issued OdontoPrev shares, increasing its ownership to 91.35% from 53.54%.
The implied valuation for the healthcare asset transfer is approximately BRL30.5 billion, or roughly 9x price-to-earnings, based on the unit's BRL3.4 billion profit in 2025. No primary or secondary offering is planned at this time.
Itau BBA estimates the transaction could add BRL0.80 to BRL1.50 per share, or 4% to 7%, to Bradesco's market capitalization if the healthcare vehicle trades at 10x to 12x price-to-earnings versus Bradesco's consolidated 7.6x multiple. The healthcare asset is currently marked at BRL15.5 billion in equity value on Bradesco's books. Bradesco currently trades at a P/E ratio of 9.57, and according to InvestingPro analysis, the stock appears undervalued at its current price of $4.15 versus a Fair Value of $4.21. The stock has delivered a remarkable 116% return over the past year and is trading near its 52-week high of $4.29, reflecting strong investor confidence in the bank's strategic moves.
The deal is expected to be accretive to Bradesco's capital, though the exact amount remains unclear. Itau BBA maintains Bradesco as an Outperform and among its top picks in Brazilian banks.
In other recent news, Banco Bradesco reported its fourth-quarter 2025 earnings, which showcased a revenue beat. However, the earnings per share (EPS) slightly missed expectations set by analysts. Despite this mixed financial report, the revenue performance was a positive highlight for the company. The earnings call did not mention any mergers or acquisitions. Analyst firms have not provided any recent upgrades or downgrades for Banco Bradesco following the earnings announcement. There were no other significant company developments reported. These recent developments provide insight into Banco Bradesco's financial performance for the quarter.
This article was generated with the support of AI and reviewed by an editor.