J.P. Morgan LatAm FTM 25 Jun 26: Argentine Banks; Gerdau; Brazilian Homebuilders; Cencosud and More. Thu Jun 25 2026

Research evidence excerpt

J.P. Morgan LatAm FTM 25 Jun 26: Argentine Banks; Gerdau; Brazilian Homebuilders; Cencosud and More. Thu Jun 25 2026

Latin America Equity Research

LatAm First to Market 25 June 2026

Top Stories

Argentine Banks (Yuri R Fernandes)

Better NIM To Offset Lower Growth - Increasing Estimates into 2Q26

We recently met with Argentine banks to discuss macro and sector-specific trends. Overall, the tone was slightly more

constructive on margins, which could expand, helped by lower funding costs: private bank BADLAR (i.e. cost of 30-35 day

deposits) is tracking at ~21% vs. ~30% in 1Q26, while asset yield repricing was more limited. We believe this will drive ROE

recovery—believe most investors called for flattish or decreasing NIM, which could drive EPS upside risk. However, regulatory

figures remain negative for asset quality (i.e. NPL still increasing), and loan and deposit growth (especially in ARS) continues to

be lackluster. Notably, ARS loans are growing at ~2.5% M-o-M pace, not much above 2.1% inflation in May. We revised our

2Q26 EPS by +6-7% and increased our 2026 estimates by 4-8% for Galicia and Macro, respectively. We see the current risk-

reward as attractive, with the stocks trading at 1.2-1.5x P/BV for companies with ROE improving, while CDS is moving lower

(now ~430bps from ~560bps in January) and an economy that is growing. While NIM recovery may eventually fade, we believe

banks have potential loan growth and asset quality normalization as tailwinds into 2027. We continue to favor BMA (OW) and

GGAL (OW) over SUPV (N), and we establish 2027 price targets of $85 per share for GGAL (65% upside), $132 per share for

BMA (41% upside), and $13 per share for SUPV (28% upside). More details below.

Gerdau (Rodolfo Angele, CFA)

Strong Foundations, Clear Next Steps