UBS BB raised the recommendation for CAIXA SECURITIES (CXSE3) from neutral to purchase, with the target price from $ 16 to $ 18. According to the bank, the paper offers an attractive entry point after follow-on, with 2% appreciation and 6% drop in the last 12 months.
Analysts also point out that the insurer has a faster growth pace and negotiates with lower multiple prize than BB Segurity (BBSE3).
Among the Brazilian insurers, the bank’s preference is by Porto (PSSA3) (more attractive assessment and growth in multiple segments), followed by CXSE3 and BBSE3 – which are still good load options with dividend yield close to 10%, especially in a more challenging/uncertain macroeconomic scenario.
On the other hand, even with the target price increase from R $ 43 to R $ 46 (compared to R $ 43), UBS BB downgraded the BB purchase security recommendation for neutral, as recent performance ( +10% in the year and +21% in 12 months) suggests that good trends are already mostly priced.
Cxse3 deserves a premium multiple compared to BBSE3?
For BB UBS, Caixa Seguridade deserves to negotiate with a prize compared to its main competitor, at least in the short term, based on higher profit growth – projection of +20% CXSE’s net income growth in 2025 and +9% by 2026, while providing BB Security with +12% and +5%, respectively.
The bank also sees Caixa Seguridade business model as more resilient and predictable, considering the characteristics of Real Estate Credit (CXSE) versus Rural Credit (BBSE).
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In addition, UBS BB highlights the longer contract with Caixa Econômica Federal (CEF), which reduces short -term uncertainties.
The bank also points out that cash security liquidity increased after follow-on, with an average daily volume (ADTV) of approximately R $ 80 million, compared to R $ 65 million in the three months prior to the offer.
Currently, UBS BB sees Caixa Seguridade negotiating with a 17% prize compared to BB Segurity in the estimated multiple price/profit for 2025, compared to an average of 30% registered last year.