Bank of America updates Latin American equity portfolio

Bank of America (BofA) has updated its Latin American equity portfolio, implementing changes to its recommended holdings in Brazil. The bank removed Localiza (RENT3) from its list due to a lack of catalysts, while adding Motiva (MOTV3) based on attractive valuation.

For the Brazilian market, BofA maintains a ‘marketweight’ (neutral) recommendation. This stance reflects concerns regarding challenging interest rate perspectives, weak corporate earnings expectations, and fiscal uncertainty following elections. The bank notes that its neutral position could be challenged by binary election results and market perceptions of candidate proposals.

BofA’s strategy prioritizes large-cap, liquid companies capable of generating cash flow in a prolonged high-interest-rate environment. The bank’s current projections include a terminal Selic rate of 13.75% in 2026, though it suggests that benign inflation data and economic deceleration may support further rate cuts. Recommended Brazilian holdings include Itaú Unibanco, Bradesco, BTG Pactual, Petrobras, Vale, JBS, and Raia Drogasil, among others.