Why Banco Bradesco S.A. (BBD) Is Susceptible To Wild Price Swings

Analysts at JP Morgan upped their rating on shares of Banco Bradesco S.A. (NYSE:BBD) from Neutral to Overweight in their opinion released on January 22. Goldman analysts bumped their recommendation on BBD stock from Neutral to Buy in a separate flash note to investors on September 11.

By watching the trading activity of corporate insiders, it will become easier to get a sense of Banco Bradesco S.A. (NYSE:BBD)’s prospects.

Banco Bradesco S.A. (BBD) is expected to jump by 2.07 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $12.92-month high price target. This represents a whopping 33.47 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $10.14, which represents a return potential of 4.75 percent when compared to the closing price of the stock of $9.68 on Tuesday, December 04. The lowest price target for the stock is $5 — slightly more than -48.35 percent from BBD’s current share price.

The shares are currently floating around the first support level of $9.52. Below this, the next support is placed in the zone of $9.36. Till the time, the BBD stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 54.77 on daily chart, which may remain a cause for concern. If the price breaks below $9.36 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $9.86 mark may result into a pull-back move towards $10.04 level.

BBD shares dropped -0.1 points or -1.07 percent on Tuesday to $9.68 with a light trade volume of 14.455 million shares. After opening the session at $9.77, the shares went as high as $9.88 and as low as $9.54, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $64.8 billion and now has 6.69 billion shares outstanding. Banco Bradesco S.A. (BBD) stock has lost -1.72 percent of market value in 21 trading days.

BBD stock has a trailing 3-year beta of 0, offering the possibility of a lower rate of return, but also posing less risk. The portion of a company’s profit allocated to each outstanding share of common stock was $0.7 a share in the trailing twelve months. The stock’s value has surged 5.49 percent year to date (YTD) against a rise of 9.32 percent in 12 month’s time. The company’s shares still trade -18.08 percent away from its 1-year high of $11.82 and 50.01 percent up from 52-week low of $6.45. The average consensus rating on the company is 2.1, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a sell.

Shares of Banco Bradesco S.A. (BBD) are trading at a P/E ratio of 13.39 times earnings reported for the past 12 months. The industry BBD operates in has an average P/E of 18.6. Its P/E ratio went as low as 4.8X and as high as 12.01 over the 5-year span. Further, it is sporting a 4.37 on the Price-to-Sales ratio. Compare this with the industry average P/S of 7.82. 0 percent is the gross profit margin for Banco Bradesco S.A. and operating margin sits at 0 percent. Along with this, the net profit margin is 0 percent.