Banco Do Brasil: 2 Sell-Offs Leave The Core Bank Near 0.2x Book (Rating Upgrade)

I'm upgrading Banco do Brasil to Buy. After the election sell-off and a weak 3Q26, the stock trades below 0.5x book, the cheapest level in at least 10 years. 3Q26 adjusted profit fell to R$1.3 billion, the 2026 guidance was cut almost in half, and the payout went down to 25%, so dividends will be weak in the short term. Loans made under the new and stricter rules have a 91% on-time payment rate, against 76% for older crops, which shows the problem is concentrated in the old loans.