Brazilian Insurers: Rally Aftermath - Downgrading CXSE to UW, Downside to BBSE

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Brazilian Insurers: Rally Aftermath - Downgrading CXSE to UW, Downside to BBSE

J P M O R G A N Latin America Equity Research

23 July 2026

Brazilian Insurers

Rally Aftermath - Downgrading CXSE to UW, Downside

to BBSE

We revisit our Brazilian insurance preference after the strong rally in the sector Latin American Financials

ACsince June (15-28% vs Ibovespa 2%). Notably, we downgrade Caixa Seguridade Guilherme Grespan

to Underweight with current share price offering 0% upside potential vs our R$22 (55-11) 4950-3058

Dec-27 PT. We also reinforce our Underweight rating on BB Seguridade, as we guilherme.grespan@jpmorgan.com

now see ~20% downside vs. our newly established Dec-27 PT of R$34 (vs previous Banco J.P. Morgan S.A.

R$33 Dec-26 PT). Both companies are trading ~3x standard deviations above their Yuri R Fernandes

3-year historical average P/E, with little change to earnings dynamics or growth (1-212) 622-3400

yuri.r.fernandes@jpmorgan.com

outlook. We don’t think higher rates for longer justify the full move as Selic J.P. Morgan Securities LLC

sensitivity is limited nowadays - we estimate only a 1-2% EPS tailwind for each

Fernanda Sayao

100bps of Selic for CXSE/BBSE. While insurance is undoubtedly a defensive (55-11) 4950-6588

sector amid higher rates and political volatility, we do not think BBSE and CXSE fernanda.sayao@jpmchase.com

offer attractive risk-reward at these levels. There is also a risk of loan growth Banco J.P. Morgan S.A.

deceleration at Caixa (notably in the mortgage book) in 2027 and even for BBAS Diego Marquez Antonio

as agribusiness loans should grow on lower amortization, but new origination may (52-55) 5339-94899

not be as solid as the bank needs to be selective on it. On a separate note, we take diego.marquez@jpmorgan.com