ITUB4's drop this week didn't come from its earnings report—it came from the ballot box. The stock has accumulated a loss of 19.69% since the second round of the elections, tracking an Ibovespa index that fell 18.12% over the same period. Tonight, the bank will release its third-quarter 2026 results with projections that remained untouched by the political shock.
Why Are ITUB4 Shares Falling?
ITUB4 shares are falling because the entire Brazilian market pulled back after the second round of the elections. There is no specific negative news regarding Itaú: the 19.69% weekly drop mirrors the broader Ibovespa, which lost 18.12% over the same timeframe. However, the selling pressure was not distributed evenly across the market's large-cap stocks:
Vale (VALE3) bucked the trend with a modest 0.24% gain for the week—an asset driven primarily by external factors and Chinese demand, making it less susceptible to domestic political shocks. Banco do Brasil fell nearly twice as much as Itaú due to structural reasons: BBAS3 is a state-controlled bank, directly exposed to the risk of government interference in credit policy and dividend payouts. That exposure amplifies the sell-off when a new administration takes office. Itaú is private, with autonomous management, which historically acts as a buffer during shocks of this nature.
ITUB4 shares closed Tuesday's session at R$ 38.52, down 0.40% on the day—showing signs of stabilization after a turbulent week. The bulk of the selling has already taken place; what comes next depends on what tonight's earnings report reveals.
What Will Itaú Report in Its Q3 2026 Earnings?
Itaú Unibanco will release its third-quarter 2026 results today after the market closes. Projections compiled by LSEG point to a net income of R$ 12.6 billion and revenue of R$ 48.3 billion for the period.
LSEG consensus for Q3 2026
Return on equity
Versus Q3 2025, Bradesco BBI estimate
Bradesco BBI projects R$ 12.5 billion—virtually flat compared to the previous quarter, but up 12% year-over-year. According to BBI analysts, the results are expected to be supported by moderate credit portfolio expansion, improved treasury revenue, and delinquency rates in line with expectations, though service revenues remain a point of attention due to potential pressure. Goldman Sachs maintains its view that Itaú is the best-positioned bank in the sector, even in the face of the selective credit environment that marked the third quarter.
Will Solid Earnings Today Reverse the Drop in ITUB4?
Not automatically—but they serve as an anchor. Tonight's earnings report answers the question the electoral shock prevented the market from calculating: did Itaú's fundamentals hold up against the adverse environment, or are September's projections no longer viable?
If net income hits the projected R$ 12.6 billion and ROE remains above 23.3%, the market will have a concrete figure to evaluate the current price of R$ 38.52. The nearly 20% weekly drop has already priced in a significant portion of political risk; a strong report narrows the gap between today's price and what equity research desks view as fair value. The bank also has the fourth-quarter interest on equity (JCP) calendar ahead—Itaú announced the rules for the new JCP in October, and this shareholder payout has not been canceled by the political climate.
If the numbers disappoint—particularly if delinquencies surprise to the upside or treasury revenues fall well short of expectations—the market will interpret that the political shock hit the bank's fundamentals sooner than analysts projected. That would trigger a new wave of selling. However, consensus estimates ahead of the release do not point to this scenario: BBI and LSEG projections were built on a selective credit environment and already incorporate a cautious stance.
Itaú acts as a bellwether for Brazil's private banking sector. What the bank reports today regarding non-performing loans, net interest margin, and credit quality will calibrate how the market gauges the extent to which the October political shock actually contaminated sector earnings—not just Itaú's, but those of all private banks still reporting this season.
This week's decline was driven by broader market sentiment, not bank fundamentals—but tonight's earnings report provides Itaú's first actual figures under the new political landscape. If net income and delinquency metrics confirm projections, the stock will have the fundamentals to bounce back; if it disappoints, the downward pressure could continue. There is no action to take before the results are released: decisions to buy more, trim positions, or hold should be calculated with the actual numbers in hand, not beforehand.
Net income below R$ 12.3 billion — signals that pre-election projections are no longer sustainable; reassess the short-term thesis and check what management says about delinquencies and the credit portfolio during the earnings call.
Delinquency rates above historical norms — Itaú reports its allowance for loan losses alongside earnings; an unexpected spike signals deterioration that the market has not yet priced into the R$ 38.52 share price.
Results above R$ 12.6 billion with ROE ≥ 23.3% — provides a foundation for a recovery; watch whether equity research desks revise their target prices in the days following the release, which will dictate the strength of any potential rebound.
