Brazil Equity Strategy MVPs – July 2026: Positioned for Higher-for-Longer: Favoring Exporters in a Discounted Brazil

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Brazil Equity Strategy MVPs – July 2026: Positioned for Higher-for-Longer: Favoring Exporters in a Discounted Brazil

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20 Jul 2026 06:56:00 ET │ 36 pages

Brazil Equity Strategy MVPs – July

Positioned for Higher-for-Longer: Favoring Exporters in a Discounted

Brazil Andre Mazini, CFA AC +55-11-4009-2017

andre.mazini@citi.com

CITI'S TAKE

Gustavo Schroden AC

Our MVP portfolio performed in line with the IBOV over the past month, with gustavo.schroden@citi.com

both up 3.2%. We think persistent inflation in the US and a new Fed Chair

building credibility may sustain higher rates for longer, resulting in a Gabriel Barra AC

stronger USD. We therefore favor exporters such as Embraer, Petro and Prio gabriel.barra@citi.com

and domestics stories less elastic to the Brazilian economy. We continue to

see Brazil's 8.6x forward P/E representing one of the widest discounts to Joao Pimentel AC

developed markets in recent memory, while resilient aspects of the joao.pimentel@citi.com

country’s investment case include: 1) Brazil less exposed to AI disruption AC João Pedro Soaresgiven its composition of jobs and sectors (i.e. less high-skilled, high

exposed sectors), 2) far away geographically and ideologically from joao.soares@citi.com

geopolitical hotspots, 3) trade holding up well despite the new high-tariff AC Leandro Bastos, CFA

equilibrium. As the BCB gains capacity to cut rates, the risk/reward for leandro.bastos@citi.compatient allocators increasingly skews to the upside.

Filipe Nielsen AC

US Tariffs Update — On July 15, the USTR announced a Section 301 action against filipe.nielsen@citi.com

Brazil (effective July 22), imposing an additional 25% tariff on most manufactured

Renata Cabralgoods and capital equipment, replacing the existing 10% ad valorem Section 122

surcharge.