Initiating coverage of Banco Bradesco (BBD +2.6%) with a Buy rating, Citi says the bank is the best play for the possible recovery in the Brazilian economy. Citi also notes BBD's Bradesco Seguros has a hidden value equating to about 14% of the overall company's market cap.
Itau Unibanco (ITUB +2.3%) is also started at a Buy. While BBD is a pick thanks to its domestic exposure, ITUB, says Citi, is on its way to being a leader in the South American region, citing the acquisition of a controlling stake in Chile's Corpbanca.
Banco de Brasil is also initiated with a Buy rating (no ADRs trade here).
Started at Sell is Banco Santander Brasil (BSBR +1.5%), as Citi says improvement is more than priced in after the stock's 113% run this year.
By comparison, BBD is higher by "just" 81% YTD, and ITUB 61%.