Banco Mercantil do Brasil S.A.

BOVESPA:BMEB4 Stock Report

Market Cap: R$4.0b

Banco Mercantil do Brasil Valuation

Is BMEB4 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of BMEB4 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: BMEB4 (R$40.75) is trading above our estimate of fair value (R$7.57)

Significantly Below Fair Value: BMEB4 is trading above our estimate of fair value.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for BMEB4?

Key metric: As BMEB4 is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for BMEB4. This is calculated by dividing BMEB4's market cap by their current earnings.
What is BMEB4's PE Ratio?
PE Ratio6.1x
EarningsR$697.44m
Market CapR$4.01b

Price to Earnings Ratio vs Peers

How does BMEB4's PE Ratio compare to its peers?

The above table shows the PE ratio for BMEB4 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average7.9x
ABCB4 Banco ABC Brasil
5.2x9.3%R$5.0b
BRSR6 Banco do Estado do Rio Grande do Sul
5.6x19.8%R$5.7b
BMGB4 Banco BMG
6.3xn/aR$2.3b
BPAN4 Banco Pan
14.4x39.5%R$9.4b
BMEB4 Banco Mercantil do Brasil
6.1xn/aR$4.0b

Price-To-Earnings vs Peers: BMEB4 is good value based on its Price-To-Earnings Ratio (6.1x) compared to the peer average (7.9x).

Price to Earnings Ratio vs Industry

How does BMEB4's PE Ratio compare vs other companies in the South American Banks Industry?

1 CompanyPrice / EarningsEstimated GrowthMarket Cap
BMEB4 6.1xIndustry Avg. 8.7xNo. of Companies9PE0612182430+
1 CompanyEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: BMEB4 is good value based on its Price-To-Earnings Ratio (6.1x) compared to the South American Banks industry average (8.7x).

Price to Earnings Ratio vs Fair Ratio

What is BMEB4's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

BMEB4 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio6.1x
Fair PE Ration/a

Price-To-Earnings vs Fair Ratio: Insufficient data to calculate BMEB4's Price-To-Earnings Fair Ratio for valuation analysis.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Insufficient data to show price forecast.

Discover undervalued companies

Bancolombia

Col$36.3t

Provides banking products and services in Colombia and internationally.

C2OL34

Col$47.81

7D

1.5%

1Y

38.8%

Banco Bilbao Vizcaya Argentaria

€52.8b

Provides retail banking, wholesale banking, and asset management services in the United States, Spain, Mexico, Turkey, South America, and internationally.

BILB34

€56.58

7D

-1.3%

1Y

25.8%

Banco do Estado do Rio Grande do Sul

R$5.7b

A multiple-service bank, provides a range of banking products and services primarily in Brazil.

BRSR3

R$11.89

7D

1.1%

1Y

-3.3%