IRB shares have jumped 63% since their 2024 lows; understand what explains the rise and whether there is still room for further appreciation, according to BTG Pactual (Image: Reproduction/ IRB's Youtube)
The year has been a rollercoaster for stocks IRB (IRBR3). After a drop in 2024 that reached -32% at the end of July, the shares recovered since the release of the 2Q24 results, on August 14, and rose 43% until the market close last Tuesday (17).
Shares are now up 11% year-to-date through 2024, when considering the same period mentioned above.
After such a vigorous rise – 63% since the year's lows – it is natural to question whether the stock has already captured its full potential or whether it still has more room for further appreciation.
Is it still worth investing in IRB? BTG Pactual responds
According to the BTG Pactualthe largest investment bank in Latin America, one of the reasons that led to the fall in shares was concerns related to the impact of the floods in Rio Grande do Sul on the company's results.
However, the event was “overcome” by the company, according to the bank’s analysts. “Looking ahead, higher interest rates for an extended period, the RS event already overcome, and a tighter reinsurance market, pushing up prices, seem to support future net profit growth/recovery.”
Furthermore, BTG Pactual analysts highlighted the market value of “only” R$3.9 billion for a highly liquid stock, such as IRBR3.
“The second quarter results helped reduce the risks of the thesis, as IRB managed to report a net profit of R$65 million, despite the impact of R$257 million in additional costs from claims related to the crisis in Rio Grande do Sul.”
In this sense, analysts continue to see investment in IRBR3 as “attractive”.
“Trades at 0.9x latest book value and 7.8x 2025 P/E, with 2025 earnings and ROE levels not yet considered recurring, indicating potential for further ROE growth in the coming years.”
Therefore, BTG Pactual's response is direct and straightforward: It is still worth investing in IRB (IRBR3).
IRB and 9 more: the most promising small caps to buy now, according to BTG Pactual
Every month, BTG Pactual analysts update the small caps portfolio of the bank. In total, the portfolio has 10 shares which necessarily have a market value of less than R$15 billion.
And the historical profitability of the portfolio is impressive: from July 2010 to September 1, 2024, the portfolio yielded 4,820%. To give you an idea, the Ibovespa yielded only 123.2% in the period. See the comparative chart:
In the year, the performance of the BTG portfolio is also much higher than that of the index: 19% against 1.4% of the Ibovespa.
The good news is that you can check out the complete portfolio in a 100% free.
As you know, IRB is one of the stocks that are part of the stock selection.
To know the other 9 as one courtesy of BTGthe largest investment bank in Latin America, just click here or the button below.
This material is not related to specific investment objectives, financial situation or particular needs of any specific recipient, and should not serve as the sole source of information in the investor's decision-making process. Before making a decision, the investor should carry out, preferably with the help of a duly qualified professional, a thorough assessment of the product and its risks in light of their personal objectives and risk tolerance (suitability).