Itaúsa’s action (ITSA4), controller of Itaú Unibanco (ITUB4), is being negotiated with a 24.6% discount on the bank, exceeding the historical average of 10 years of 22.2%. Given this, UBS BB reaffirms that the current discount is excessive and reinforces its view that Itaúsa remains the best vehicle to invest in Itaú.
The bank also said you see multiple triggers that can reduce the Holding discount over time. With this, it maintained purchase recommendation and target price of $ 13.
Read more: genius elects Itaúsa as a favorite with an eye on the end of tax inefficiency
First, UBS BB points out that the end of PIS/COFINS taxation on JCP should reduce the holding company discount. The new legislation replaces PIS/COFINS with CBS and eliminates taxation on interest on equity (JCP) received from the investers, which represents a relevant economy for holding.
PIS/COFINS taxes (about the JCP received) totaled R $ 453 million by 2024 and, during the 4T24 conferencing, the management indicated that they should reach R $ 650 million by 2025 (Itaú should pay more JCP due to the increase in TJLP – long -term interest rate).
According to estimates, based on a 10% actual discount rate, tax inefficiency should have a value of R $ 5.5 billion (or 5% of Itaúsa’s market capitalization).
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The bank also points to the potential dividends of non -financial companies in the medium term. Non -financial companies paid a little over R $ 400 million in dividends in 2024, which is not enough to compensate for tax inefficiency (R $ 453 million in 2024), but has compensated for operating expenses (R $ 177 million in 2024) and part of financial expenses (R $ 294 million in 2024).
The combination of higher dividends of non -financial companies and the end of tax inefficiency could lead Itaúsa to distribute more dividends than those received from Itaú.
Finally, UBS points to the unlocking of unlisted companies, as some subsidiaries of Itaúsa are not listed, and consequently investors use their accounting value, which can underpin these assets.
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“The main three unlisted assets (NTS, Aegea and Cup) together represent about 4% of Itaúsa’s total assets – we cannot rule out the possibility of corporate events that can unlock the value of some of these companies,” the bank says in a report.
It should be noted that, at the end of last month, the genius raised the holding of the Holding Itaúsa for purchase, being the top pick in the banking sector, since the company negotiates with an excessive discount on its sum of the parts (SOTP).
This represents an attractive purchase opportunity, especially in view of the imminent elimination of tax inefficiency from January 2027, with the approval of Complementary Law 204/23, sanctioned by the Presidency of the Republic in January 2025.
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Common dividend yield (dividing the price of action) 21% higher than Itaú itself, the genius believes that the discount between its market value and the fair value of the holding should be narrowed as the market begins to precet the end of fiscal distortion – reinforced by its constructive view of Itaú, its main investment, which until then occupied the main recommendation in the sector.