Itaú BBA Backs Vale and Santander Brasil for 6% Weekly Return While Safra Lifts Embraer

The Quick Take

• Itaú BBA recommends buying Vale (VALE3), Santander Brasil (SANB11), and four other stocks for over 6% return potential this week
• Safra Corretora recommends Embraer (EMBJ3) as a buy while suggesting two sell positions for day-trade gains of over 4%
• Brazilian equity desks are actively picking stocks despite political uncertainty from São Paulo gubernatorial race

Itaú BBA's equity trading desk has recommended a basket of six Brazilian stocks including Vale (VALE3) and Santander Brasil (SANB11) for potential returns exceeding 6% on a week-trade horizon, while Safra Corretora separately recommended Embraer (EMBJ3) as a buy alongside two sell recommendations. The week-trade recommendation format — common in Brazilian broker research — targets momentum-driven retail and high-frequency investors who use sell-side short-term calls to position around near-term catalysts like earnings, dividends, and macro data releases.

Vale's inclusion in the Itaú BBA basket is significant: as the world's largest iron ore producer, Vale's stock performance reflects both global steel demand expectations and the BRL/USD exchange rate. A positive recommendation on Vale implies the broker expects near-term iron ore price support, likely tied to Chinese stimulus signals or restocking demand. Santander Brasil's inclusion suggests the broker sees Brazilian banking valuations as attractive given elevated Selic rates sustaining net interest margins even as credit quality concerns weigh on the sector.

Embraer's Safra recommendation reflects optimism around the jet manufacturer's commercial aviation order book, which has benefited from the global fleet-renewal cycle and growing demand from low-cost carriers in Latin America and Southeast Asia. The macro variable for all three picks is the BRL exchange rate, which drives both commodity export revenues and the repatriation value of internationally-earning companies. A weaker BRL makes Vale and Embraer more competitive globally but raises local input costs.

Synthesized from 2 sources.