Analysts raise forecasts for the stock market in 2022

Over the past few weeks, bank and brokerage analysts have revised upward their forecasts for the Ibovespa stock index in 2022.

The calculations of BofA (Bank of America), XP, Ativa and Guide now point to the main stock index of the local Stock Exchange between 130 thousand and 135 thousand points until December, compared to previous forecasts closer to 120 thousand points.

Although economists predict a weak growth of the Brazilian GDP (Gross Domestic Product) for this year, the difference around 10 thousand points is essentially due to a global macroeconomic scenario that tends to continue favoring large companies in the Brazilian market.

In an environment of pressured inflation and rising interest rates, experts predict that commodities and banks, which have already been the main responsible for the recent appreciation of the stock market, will continue to deliver satisfactory results to investors.

The majority expectation of market agents also points to the continuity of an international financial flow directed to the country, with the Russian invasion of Ukraine driving away investors from emerging countries in Europe, the region most economically impacted by the conflicts.

In this scenario, the Ibovespa recorded an increase of approximately 11.4% in the accumulated of 2022, until April 13, quoted at 116,781 points.

At the end of March, XP revised its forecast for the stock index in December from 123,000 to 130,000 points, which now includes an appreciation potential of approximately 11.3% in relation to the closing of Wednesday.

In the case of the Guide brokerage team, the estimate was revised last month from 120,000 to 130,000 points. And from 117,000 to 135,000 by the calculations of Ativa’s analysts.

At the beginning of April, the BofA team updated the forecast for the Ibovespa from 125,000 to 135,000, including an outlook for an increase of around 15.6% by the end of the year.

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Analysts at the US bank say the move comes on the heels of better-than-expected earnings for both commodity companies and big banks in upcoming earnings reports.

“Brazil should continue to be an important destination among emerging markets due to the weight of valuable names”, point out BofA analysts in a report.

Data from B3 indicate an entry of approximately BRL 68 billion in foreign funds on the Stock Exchange in 2022. B3 even corrected at the beginning of the month the data on the flow of international investors in the country, which was not enough to the point to affect analysts’ positive assessment of the region.

BofA recalls that, in a scenario of high global interest rates in the United States and Europe, investors have been rotating their portfolios, migrating from technology names with high growth potential to more cyclical bets on banks and commodities. .

In this sense, Suzano, PetroRio, Eletrobras and Itaú Unibanco are among the preferences in the American bank’s Latin America portfolio.

“We are more optimistic than the market consensus on several commodities (especially oil, aluminum and pulp) and on bank earnings.”

Intern consumption

In XP’s recommended portfolio for April, major exporters such as Petrobras and Vale share space with Banco do Brasil shares.

XP’s chief strategist, Fernando Ferreira says that, if raw material prices remain close to the high levels at which they are in the international market, companies in the sector will continue to have strong cash generation and the market as a whole will be forced to revise upwards the expected earnings for these companies.

Ferreira also states that, given the still challenging macroeconomic scenario in the country, with rising inflation and interest rates and a GDP projected close to zero for 2022, it is too early to make a total migration to the more domestic names of the Exchange.

“The prospect of higher interest rates in Brazil is the main drag that could prevent shares from performing well,” says the chief strategist at XP.

This does not mean, however, that there is no room in the suggested portfolio for papers more linked to the local economy, as is the case with Arezzo and Iguatemi.

These are names focused on higher purchasing power classes, which tend to present a more resilient performance than the average, says Ferreira.

interest drop

At Guide, the recommended portfolio for April includes consumer and retail stocks such as Assaí and Grupo Soma, without prejudice, however, to the presence of exporters such as Petrobras, Vale, Gerdau and JBS, in addition to Itaú in the financial sector.

Guide market analyst Rodrigo Crespi says that while in developed countries the interest rate increase cycle is just beginning, in Brazil this process is already at a much more advanced stage.

And, with the possibility of the BC (Central Bank) starting a cycle of interest rate cuts at some point in the second half of the year or at the beginning of 2023, papers more linked to local activity that did not have the positive performance of banks and commodities may benefit. , predicts Crespi, adding that the reopening of the economy and the increase in mobility should continue to favor names more linked to the domestic scenario.

In addition, even if only partially, inflation is being somehow passed on to the final consumer, which tends to generate a nominal increase in profits, points out the Guide analyst.

He also says that he considers the electoral risk relatively low. Neither of the two candidates most likely to win — former president Luiz Inácio Lula da Silva and current president Jair Bolsonaro — should lead to a relevant fiscal deterioration if elected, says Crespi.

Volatility on the way

Head of research at Ativa, Pedro Serra also points to the global context favorable to commodities and banks as the main reason for the revision in the Ibovespa projection.

The broker’s recommended portfolio for April has names such as Vale, Suzano and Vibra Energia, in addition to the banks Bradesco and Itaú.

Serra points out, however, that the path to 135,000 points should be marked by sessions of intense volatility, with the elections in Brazil and global uncertainties about the war in Ukraine and related to high interest rates in developed countries.

In order to protect himself from market bumps, but also while taking advantage of the favorable moment for commodities, the specialist advises investors to hold PetroRio shares to the detriment of Petrobras shares, naturally more susceptible to the political risk intrinsic to state-owned companies.

Among the names most linked to the local economy, stocks from companies such as Petz, Arezzo, Natura and Grupo Mateus stand out in Ativa’s portfolio. “It is not for investors to buy shares indiscriminately, but there are some good stories of quality companies that ended up being left behind”, says Serra.