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Is Banco Santander-Brazil (BSBR) Stock Undervalued Right Now?

Zacks Equity Research
·2-min read

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One company value investors might notice is Banco Santander-Brazil (BSBR). BSBR is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 10.26 right now. For comparison, its industry sports an average P/E of 11.22. Over the last 12 months, BSBR's Forward P/E has been as high as 12.62 and as low as 4.82, with a median of 8.63.

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Finally, we should also recognize that BSBR has a P/CF ratio of 7.46. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. BSBR's current P/CF looks attractive when compared to its industry's average P/CF of 13.73. Over the past year, BSBR's P/CF has been as high as 8.71 and as low as 3.16, with a median of 5.09.

Value investors will likely look at more than just these metrics, but the above data helps show that Banco Santander-Brazil is likely undervalued currently. And when considering the strength of its earnings outlook, BSBR sticks out at as one of the market's strongest value stocks.


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Zacks Investment Research