Just over a week before the start of the first quarter 2026 earnings season, Itaú BBA sent clients a preview of the financial sector's performance during that period. And, in that assessment, the balance was unfavorable for two companies.

The investment bank downgraded its recommendation for BB Seguridade from market perform (equivalent to a neutral rating) to underperform (equivalent to a sell), and also reduced the target price for the stock from R$35 to R$32 - the stock is currently trading on screen around R$35.

Also in the insurance market, Itaú BBA downgraded its recommendation for Caixa Seguridade from outperform (equivalent to a buy) to market perform, but raised the target price for the stock from R$17 to R$18 - the stock has been fluctuating near R$19.

Given the prospect of a weaker start to the year for the insurance sector, the bank highlights that, in the case of BB Seguridade, operational challenges are intensifying and projects a 1.5% drop in premiums issued in 2026, to around R$ 16 billion, at the lower end of the projections.

In this context, analysts point out that agricultural insurance, which registered a 29% drop in the first two months of the year, is the worst-performing line of business. Another factor putting pressure on the market will be credit life insurance, which fell 7% in the same period, impacted by high interest rates.

Itaú BBA also highlights the negative effects on the sector – and BB Seguridade – of the unfavorable scenario in agribusiness, marked by tighter credit conditions, reduced margins, and increased costs of fertilizers and transportation, in addition to exchange rate volatility.

“In our opinion, recent dynamics suggest a risk of a downside in the 2026 premium projection, which also impacts estimates for 2027,” write the analysts, who, among other things, project a 6% decline in profits this year and a modest 2% recovery in 2027.

They further note that, with a P/E ratio of 8.1x, the dividend yield of approximately 11% is the main attraction of the stock. However, this component is not enough to compensate for the longer period of weak earnings.

With regard to Caixa Seguridade, Itaú BBA sees more favorable operational trends, based on data such as the 13% year-on-year growth recorded in January in the mortgage loan portfolio, and 16% in pension plans.

Conversely, the bank points out that the life insurance segment is facing difficulties, with a 38% drop in the first two months of 2026, due to problems with the INSS (Brazilian National Social Security Institute) and high interest rates.

Analysts emphasize, however, that the downgrade in recommendation is justified, in fact, by the valuation of the operation, given the estimated P/E multiple of 12.7 times for 2026, in addition to a dividend yield of 6.9%. They also forecast a net profit of approximately R$ 4.6 billion for the company this year, an increase of 8%.

"Specifically in the first quarter of 2026, sequential results should be lower, with R$ 1.1 billion for Caixa Seguridade and R$ 2 billion for BB Seguridade, both showing well-managed claims," says another excerpt from the report.

Shares of Caixa Seguridade were down 2.83% around 12:10 PM, valuing the company at R$ 57.6 billion. At the same time, shares of BB Seguridade were down 1.12%. The company is valued at R$ 68.5 billion.

Significant divergence

Aside from those two operations, Itaú BBA sees a "significant divergence" in the performance of other players in the financial market. On one hand, the bank sees a more positive scenario for B3, BTG Pactual, Bradesco , and perhaps Nubank .

Analysts expect Nubank to deliver mixed results, with strong growth in its loan portfolio and revenues, coupled with increased investments and expenses to finance its global expansion, which should impact the final result.

On the other hand, regarding the major banks, Itaú BBA sees a more challenging scenario for Banco do Brasil . It projects that the operation will face its most challenging quarter, with high provision levels maintained, driven by deteriorating delinquency rates at various stages.

"The weak start to the year will require a significant acceleration of results to reach the lower end of the 2026 profit guidance, between R$ 22 billion and R$ 26 billion," write the analysts, who project a profit of R$ 21 billion for the bank this year.