Despite the positive environment, Porto Seguro (PSSA3) is trading 18% below the historical average (Image: LinkedIn / Porto)
A Porto Seguro (PSSA3) had its recommendation raised this Monday (30), by Brdesco BBIgoing from neutral to buy. The house introduced a new target price, going from R$37 to R$45 at the end of 2025.
Analyst Gustavo Schroden highlights that despite the positive environment, shares are trading 18% below the historical average — 8.2 times the price-earnings multiple for 2025.
Furthermore, the stock has a potential appreciation of 23%, in relation to last Friday's closing (27).
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“We estimate that the stock can provide a total return of 30%, assuming solid average annual earnings growth of 12.1% between 2024 and 2026, and a dividend yield of almost 7.5%”, ponders the analyst.
According to assessments, the market has not yet priced in three main pillars of Porto Seguro's thesis, namely:
- the higher Selic rate, which should give a boost to financial results;
- Porto Saúde continues to add lives at a faster pace than expected; and
- the vertical Porto Seguro (car, property and life insurance arm), which should present a resilient performance in 2025.
Aiming at this scenario, the analysis house increased its estimates on the insurer's net profit, totaling R$3.0 billion for the year 2025 and R$3.3 billion for the year 2026, with increases of 11.2% and 17.5%, both above consensus.
Is Porto Seguro really safe?
But Bradesco was not the only one to praise Porto. For Goldman, the stock offers a good risk-reward hedge, with shares trading at 7.8 times, 2025 P/E (price to earnings) — a 13% discount to insurance peers.
“The company is a leader in car insurance and P&C insurance in Brazil, and we are constructive regarding growth prospects in new sectors, such as health insurance and banking”, he says.
Goldman notes that Porto Saúde (health) represents 17% of revenues with better margins than incumbents in the sector. Porto Banco accounts for 15% with better unit economy and ROE (return on equity) than some banking peers.
“Porto Seguro is an attractive option to operate in a mature segment and in new sectors that have not yet been fully priced. We forecast a CAGR (compound annual growth rate) of 13% of EPS 2024-27E with a 13% increase in relation to the Bloomberg consensus in 2025”, he highlights.