BB Seguridade (BBSE3): Genial projects slowdown in 1Q24; understand perspectives

In a more recent report on BB Security (BBSE3), Genial Investimentos expects a slowdown scenario for the company in the first quarter of 2024, although the result remains robust, according to the house.

According to analysts, the BB Seguridade financial statements 1Q24 is expected to report profit of R$1.88 billion, up 6.50% year-on-year, but down 8.8% quarter-on-quarter. According to the company, the quarterly impact must be related to the January trend, released by Susep, which highlighted a significant increase in the rate of accidents in the agricultural sector, in addition to a negative performance of the financial result of Prev a due to the temporal misalignment between IPCA and IGPM.

“The silver lining is that we see that insurance company premiums are still strong, driven primarily by the creditor, who benefits from the Paycheck loan from Banco do Brasilin addition to the financial aspect, reversing the negative time misalignment in the coming months,” reads the report.

Despite the negative points, Genial projects it BBSE3 end the quarter on a positive note. On the other hand, the improvement isn’t enough for the company to significantly increase its earnings growth projections for the year.

“We hope that the next few quarters will be better, especially for agricultural incidents, as well as a recovery of Prev’s finances with less impact from the time difference between IPCA and IGPM. Therefore, we estimate a profit of R$ 8.17 billion for 2024 , an expansion of +6% y/y, but decelerating compared to the 2023 result,” says Genial Investimentos.

Analysts still see the BB Seguridade shares trading at attractive valuations, with a P/E of 8.1x for 2024 and a dividend yield of 10.7%. The buy recommendation was maintained, but the price target was reduced from R$48.30 to R$44, “reflecting a deterioration in the company’s cost of capital, but still presenting an attractive 31% upside.”

Performance of the BB Seguridade stock

Check out the recent stock performance BB Security (BBSE3).

Source: Terra

Rose

Rose James is a Gossipify movie and series reviewer known for her in-depth analysis and unique perspective on the latest releases. With a background in film studies, she provides engaging and informative reviews, and keeps readers up to date with industry trends and emerging talents.