Value
7.7/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 9.2 |
| P/S | 10.0 |
| Fwd P/E | 9.8 |
| PEG | 4.6 |
| Analyst target | 5.0 |
- ▸Forward P/E: 6.5x
- ▸PEG: 1.93
- ▸Attractively valued
BBD · Why this verdict
Why Banco Bradesco (BBD) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.4/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
The bank screens attractively valued at a forward price-to-earnings of 6.2x with a 44% margin of safety and strong margins of 25%, but a Piotroski score of 3 out of 9 and weak growth cap conviction; with all momentum and asymmetry gates cleared and recent earnings coming in at or above estimates, the setup supports holding an existing position rather than adding.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The stock trades at a forward price-to-earnings of 6.2x with a 44% margin of safety, placing it as one of the more attractively priced names in its peer group and providing a cushion against further deterioration in the near term. Bull case | The forward P/E expands above 9x over the next 12 months as earnings stability builds investor confidence and the valuation discount narrows. | →Stable |
| CounterA low multiple can persist indefinitely when growth is weak; the Piotroski score of 3 out of 9 suggests the balance sheet may not provide the catalyst needed to unlock the valuation discount. | ||
The bank maintains strong margins of 25% but carries a Piotroski financial strength score of just 3 out of 9, signaling that profitability is not fully translating into a strengthening balance sheet or improving financial condition across key metrics. Quality breakdown | Piotroski score rises above 5 out of 9 over the next 12 months as the balance sheet improves alongside the stable margin profile. | →Stable |
| CounterIn banking, a Piotroski score below 5 can reflect normal leverage structures rather than distress; a 25% margin demonstrates the core business is generating meaningful profitability. | ||
The stock currently trades below its 200-day moving average, but that average continues rising at +3.4% per month—a pattern consistent with a technical pullback within a longer-term uptrend rather than a confirmed trend reversal. Momentum breakdown | Price reclaims the 200-day moving average within the next 6 months as the uptrend reasserts itself and volume accumulation continues. | ↓Deteriorating |
| CounterA prolonged stay below the moving average can transition from a pullback into a structural breakdown, particularly if weak growth removes the fundamental support underpinning the recovery thesis. | ||
Revenue and earnings growth are the primary weakness in the investment case, with the bear case identifying soft growth as the main constraint on a more constructive verdict for the stock. Bear case | EPS surprise rate rises above 10% for 2 consecutive quarters from the current trailing average of 3.7%, signaling that growth is accelerating beyond the currently low expectations. | ↑Improving |
| CounterThe most recent quarter delivered an earnings beat and the three prior quarters all came in at or near estimates, suggesting the company is managing a low-growth environment without generating damaging negative surprises. | ||
The stock trades at a forward price-to-earnings of 6.2x with a 44% margin of safety, placing it as one of the more attractively priced names in its peer group and providing a cushion against further deterioration in the near term.
→StableBull case
- Expectation
- The forward P/E expands above 9x over the next 12 months as earnings stability builds investor confidence and the valuation discount narrows.
CounterA low multiple can persist indefinitely when growth is weak; the Piotroski score of 3 out of 9 suggests the balance sheet may not provide the catalyst needed to unlock the valuation discount.
The bank maintains strong margins of 25% but carries a Piotroski financial strength score of just 3 out of 9, signaling that profitability is not fully translating into a strengthening balance sheet or improving financial condition across key metrics.
→StableQuality breakdown
- Expectation
- Piotroski score rises above 5 out of 9 over the next 12 months as the balance sheet improves alongside the stable margin profile.
CounterIn banking, a Piotroski score below 5 can reflect normal leverage structures rather than distress; a 25% margin demonstrates the core business is generating meaningful profitability.
The stock currently trades below its 200-day moving average, but that average continues rising at +3.4% per month—a pattern consistent with a technical pullback within a longer-term uptrend rather than a confirmed trend reversal.
↓DeterioratingMomentum breakdown
- Expectation
- Price reclaims the 200-day moving average within the next 6 months as the uptrend reasserts itself and volume accumulation continues.
CounterA prolonged stay below the moving average can transition from a pullback into a structural breakdown, particularly if weak growth removes the fundamental support underpinning the recovery thesis.
Revenue and earnings growth are the primary weakness in the investment case, with the bear case identifying soft growth as the main constraint on a more constructive verdict for the stock.
↑ImprovingBear case
- Expectation
- EPS surprise rate rises above 10% for 2 consecutive quarters from the current trailing average of 3.7%, signaling that growth is accelerating beyond the currently low expectations.
CounterThe most recent quarter delivered an earnings beat and the three prior quarters all came in at or near estimates, suggesting the company is managing a low-growth environment without generating damaging negative surprises.
Per-dimension breakdown
Quality
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 4.5 |
| ROA | 0.7 |
| Gross margin | 0.0 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Moat | 5.9 |
| Piotroski F | 3.3 |
- ▸Strong margins: 25%
- ▸Weak Piotroski F-Score: 3/9
Growth
2.8/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 5.1 |
| EPS growth | 0.5 |
Momentum
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 6.9 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 0.0 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 6.5 |
| Price target | 7.7 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (5.0) — signal dampened
- ▸Analyst upside: 20%
Insider
3.8/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 3.4 |
| notable moves | 3.0 |
- ▸Negligible insider selling — $1,347,028 (0.003% of mkt cap)
Peer rank
5.8/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 9.4 |
| quality rank | 4.9 |
| growth rank | 4.0 |
- ▸Attractive P/E vs peers
Technical
3.3/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.4 |
| support resistance | 1.3 |
| 52w position | 7.3 |
Risk (lower is worse)
7.7/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.8 |
| days to cover | 10.0 |
| volatility | 6.6 |
| put call | 8.3 |
| implied vol | 5.9 |
| max pain risk | 3.0 |
| beta | 10.0 |
- ▸Above max pain $1
Catalyst
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 4.4 |
| dividend safety | 4.5 |
- ▸Earnings in 14 days
- ▸Dividend: 4.8%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- MOMENTUM:6.2>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:0.5<1.5@spot
Warning (1)
- EARNINGS_PROXIMITY:14d<=14d (soft)
Reward-to-Risk
0.45
Upside
+4.4%
Downside
10.0%
Sizing output
AVOID
SetupMomentum Cont — Trend continuation, RSI 67, MACD bullish
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 5.4 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Value at 7.7) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:0.5<1.5@spot) reinforce the read. Current asymmetry R:R is 0.45 — supplementary context, not the trigger for this path.
The strongest dimensions are Value at 7.7, Risk (lower is worse) at 7.7, and Sentiment at 6.5; the weakest are Growth at 2.8, Technical at 3.3, and Insider at 3.8. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of 0.45 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Deep Value Margin Of Safety
Trip ifForward P/E expands above 12x from the current 6.2x without a corresponding acceleration in earnings growth, indicating the valuation advantage has been fully priced out.
- P2Strong Margins Weak Balance Sheet
Trip ifPiotroski score rises above 6 out of 9 from the current 3 in the next annual financial report, demonstrating sustained balance sheet improvement.
- P3Pullback Within Intact Uptrend
Trip ifThe 200-day moving-average slope falls below 0% for 2 consecutive months, signaling the uptrend has ended and the pullback has converted into a confirmed trend reversal.
- P4Weak Growth Principal Drag
Trip ifEPS surprise rate exceeds 10% for 2 consecutive quarters from the current trailing average of 3.7%, indicating growth is no longer the primary drag.