{"id":97462,"date":"2026-02-09T15:31:38","date_gmt":"2026-02-09T18:31:38","guid":{"rendered":"https:\/\/murray.adv.br\/?p=97462"},"modified":"2026-02-09T15:31:38","modified_gmt":"2026-02-09T18:31:38","slug":"q4-earnings-mark-a-turning-point-for-brazilian-companies","status":"publish","type":"post","link":"https:\/\/murray.adv.br\/en\/q4-earnings-mark-a-turning-point-for-brazilian-companies\/","title":{"rendered":"Q4 earnings mark a turning point for Brazilian companies"},"content":{"rendered":"
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Analysts expect gradual profit recovery in 2026, helped by lower interest rates and operational resilience despite a sluggish economy<\/strong><\/em><\/h6>\n<\/div>\n<\/div>\n
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02\/09\/2026<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/section>\n

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The fourth-quarter 2025 earnings season may mark a turning point for Brazilian companies. Despite clear signs of economic slowdown, analysts expect operational resilience, combined with an anticipated interest rate cut starting in March, to fuel a gradual recovery in earnings throughout 2026.<\/p>\n<\/div>\n

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\u201cThe third quarter likely marked the bottom for earnings comparisons, and now we\u2019re starting to see that bottom line accelerate,\u201d said Daniel Gewehr, chief strategist at Ita\u00fa BBA. The bank estimates that, excluding the commodity sector, companies listed on the Ibovespa will post 5% annual growth in net income.<\/p>\n<\/div>\n

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Still, macroeconomic conditions remain a drag. A proprietary activity indicator from Ita\u00fa BBA points to a 0.3% contraction in GDP during the fourth quarter, led by the services sector. \u201cIt\u2019s still a challenging macro and interest rate environment, but companies are managing to deliver solid operating performance,\u201d Gewehr noted.<\/p>\n<\/div>\n

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XP Investimentos shares a similar view of a \u201cslightly positive\u201d quarter, driven more by efficiency gains than revenue expansion. For the firms under its coverage, XP projects modest 1.4% revenue growth in the fourth quarter but a robust 12.8% increase in operating profit.<\/p>\n<\/div>\n

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\u201cCompanies have low leverage and strong cash generation, and many paid record dividends,\u201d said Fernando Ferreira, XP\u2019s chief strategist, noting that retail and consumer companies are more vulnerable to the economic slowdown and the still-high benchmark interest rate of 15%.<\/p>\n<\/div>\n

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\u201cIf I had to sum it up, I\u2019d say this will be a season of divergent results,\u201d said Ricardo Peretti, equity strategist at Santander Brasil. \u201cThat\u2019s a sign that companies are still operating efficiently. The results are coming less from revenue growth and more from cost reductions.\u201d<\/p>\n<\/div>\n

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Santander forecasts a 3% drop in aggregate net revenue and a 19% decline in total net income for companies under its coverage, driven by tough comparisons and volatility in the commodity sector. But domestic-oriented sectors paint a better picture, with the bank expecting a 12% rise in EBITDA and 4% growth in net profit.<\/p>\n<\/div>\n

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Analysts expect a wide dispersion of results across sectors. There is broad consensus that low-income housing construction, utilities (energy and sanitation), and telecommunications will be among the top performers this earnings season.<\/p>\n<\/div>\n

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On the downside, retail continues to suffer from high interest rates and the migration to e-commerce. Bank of America warned that the fourth quarter looks \u201cchallenging\u201d for most retail names, with online competition, adverse weather, and aggressive pricing by e-commerce players weighing on physical stores.<\/p>\n<\/div>\n

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Steelmakers are also likely to post weak results. Both XP and Santander flagged companies like Usiminas and CSN as underperformers due to seasonal weakness and lower domestic prices.<\/p>\n<\/div>\n

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Mining, however\u2014especially Vale\u2014is expected to fare better thanks to iron ore prices holding above $100 per tonne and a rebound in copper.<\/p>\n<\/div>\n

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Monetary easing<\/strong><\/p>\n<\/div>\n

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Beyond fourth-quarter results, markets will focus on guidance for 2026.\u00a0The expected start of Brazil\u2019s monetary easing cycle at the March<\/a>\u00a0meeting of the Central Bank\u2019s Monetary Policy Committee (COPOM) is a key trigger for the stock market.<\/p>\n<\/div>\n

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\u201cThe ideal scenario would be a \u2018not too hot, not too cold\u2019 environment, allowing for rate cuts without hitting corporate results too hard,\u201d said Julia Nogueira, vice president of equity research at Morgan Stanley.<\/p>\n<\/div>\n

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\u201cCompanies will highlight positive tailwinds like tame inflation and rate cuts, but they\u2019ll also acknowledge uncertainties tied to the elections in the second half,\u201d said Peretti of Santander. \u201cMany will likely frontload deals into the coming months. I believe telecom firms will strike a more cautious tone rather than express full-blown optimism.\u201d<\/p>\n<\/div>\n

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Looking ahead to 2026, Gewehr of Ita\u00fa BBA forecasts a 20% increase in profits, driven by lower interest rates, continued GDP resilience, and stable corporate balance sheets.<\/p>\n<\/div>\n

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XP is even more bullish, projecting 23% profit growth next year, driven by a decline in financial expenses. \u201cOperationally, it won\u2019t be a very strong year, but earnings should rise sharply due to the impact of lower rates on financial results,\u201d Ferreira said.<\/p>\n<\/div>\n

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Despite the optimism, earnings-related stock volatility could remain high, just as in recent quarters. Analysts noted that\u00a0the record foreign capital inflow of R$26.3 billion\u00a0<\/a>could amplify such swings.<\/p>\n<\/div>\n

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\u201cWe saw an increase in quantitative foreign funds raising their exposure to Brazilian stocks,\u201d Ferreira said. \u201cThey tend to focus less on company fundamentals and more on whether earnings beat or missed expectations, which adds to volatility.\u201d<\/p>\n<\/div>\n

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Gewehr said international investors are still upbeat, attracted by global diversification and cheap valuations in Brazil in dollar terms, while domestic investors remain cautious. \u201cThe farther away geographically, the more attractive the valuation looks,\u201d he joked, adding that emerging market investors no longer see Brazilian equities as deeply discounted.<\/p>\n

*By\u00a0Felipe Laurence\u00a0\u2014 S\u00e3o Paulo<\/p>\n

Source: Valor International<\/p>\n

https:\/\/valorinternational.globo.com\/<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/article>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

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