Benzinga Pro data showed Itaú Unibanco Holding shares down 23.78% at $7.37 on Monday at publication time, following President Luiz Inácio Lula da Silva's reelection. Lula defeated Senator Flávio Bolsonaro in Sunday's runoff, receiving 51.8% of the vote against Bolsonaro's 48.2%. Lula's unexpected victory overturned investor bets on a shift to the right and stricter fiscal policy.
Brazilian assets declined after the election outcome. The Nomura NF Ibovespa Link ETF, listed in Tokyo and tracking Brazil's equities, fell as much as 16% in Japan. The ETF recorded its largest intraday fall since 2020. The Economic Times reported that November futures for Brazil's real dropped roughly 10% during Asian trading.
The declines followed a substantial rally as investors anticipated a possible rightward political shift. Brazil's stocks had registered their strongest session in more than six years three weeks earlier. The benchmark Ibovespa gained 12% over the past month. The real appreciated nearly 5% against the U.S. dollar over the same period. Interest-rate futures reflected expectations that a Bolsonaro administration could improve public finances enough to allow lower borrowing costs.
Separately, Itaú announced on Monday that the bank is acquiring AI startup NeoSpace for a cash price of 2,925 million Brazilian reais, approximately $580 million. The transaction announcement specifies an initial payment at closing, followed by payments over five years that depend on certain conditions. The acquisition is expected to improve Itaú's internal AI capabilities and broaden the deployment of specialized models throughout the bank's products and services. The acquisition will also help develop ia.i, Itaú's generative AI assistant, to provide more personalized customer experiences. NeoSpace will continue operating independently and retain the existing team.
Itaú is Brazil's largest privately held bank. Itaú also has substantial operations in Chile, Colombia, Argentina, Uruguay and Paraguay, exposing the bank to credit conditions across Latin America. Commercial lending accounted for 35% of total loans at the end of 2025. Consumer lending represented 43% of total loans, while foreign loans accounted for 22% of the portfolio. Itaú operates Brazil's fifth-largest insurer and ranks second among the country's asset managers. Itaú shares consequently often serve as a proxy for the condition of Brazil's financial system.
Itaú is scheduled to announce earnings on November 3, 2026. Analysts expect earnings per share of 22 cents, compared with 18 cents in the corresponding period a year earlier. Revenue is forecast at $9.53 billion, compared with $8.55 billion a year earlier. Itaú shares trade at a price-to-earnings ratio of 11.6, potentially presenting a valuation opportunity compared with peers. Analysts' consensus recommendation is Buy, with an average price target of $9.87.
Goldman Sachs retained a Buy recommendation and increased the price target to $10.50 on October 9. HSBC lowered the recommendation to Hold and set a $9.10 price target on October 8. JPMorgan retained an Overweight recommendation and raised the price target to $10 on July 7.
Itaú Unibanco Shares Drop 23.8% After Lula's Election Win
BenzingaShare
Summary
Itaú Unibanco shares fell 23.78% to $7.37 on Monday as investor sentiment shifted after Lula’s election win. Lula secured 51.8% of the vote, reversing expectations of a rightward shift. Trading volume surged amid the sharp decline. Brazilian assets also dropped, with the Nomura NF Ibovespa Link ETF down 16% in Japan and real futures falling 10%. Itaú separately announced a $580 million acquisition of AI startup NeoSpace to boost customer services.
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