2015 All-Latin America Research Team: Brazil, No. 1: Carlos Constantini & team
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2015 All-Latin America Research Team: Brazil, No. 1: Carlos Constantini & team


< The 2015 Latin America Research Team

Carlos Constantini & teamItaú BBAFirst-Place Appearances: 3

Total Appearances: 15

Team Debut: 1993Last year Carlos Constantini and his Itaú BBA team in São Paulo slipped to second place, but they are back on top, earning their third No. 1 finish in four years. The 22 researchers “have stock coverage that is hands down the broadest on the Street,” declares one fund manager, “[going] beyond the index to small-cap names that others either neglect or miss. Because the firm’s leadership demands excellence, their coverage is also the most in depth.” Even so, among the analysts’ favorite names are some of the nation’s biggest companies. For example, despite the specter of a slowdown in the Brazilian economy through December, they expect Banco Bradesco — the nation’s second-largest private lender, after Itaú Unibanco Holding — to outperform. The São Paulo–headquartered bank “can deliver double-digit earnings growth for 2015 on sound margins and good cost control,” explains Constantini, 41. In addition, management has made a strong case that delinquency rates on the loan portfolio “will not deteriorate materially,” he notes, following Bradesco’s efforts to extend higher-quality, safer credits. Trading at 28.72 reais in mid-July, the stock earns a price objective of 36.90 reais. He and his colleagues also recommend favoring Suzano Papel e Celulose, a pulp and paper manufacturer headquartered in Bahia. The stock is “relatively cheap,” Constantini says, and the producer is well positioned to take advantage of such cost-cutting opportunities as a shift toward less expensive, nearby wood products and away from higher-cost, third-party pulp with a longer average logging distance. At 20 reais the researchers’ target price for Suzano Papel implies a 42.9 percent upside to its value in mid-July.

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