UBS BB initiates Bradsaúde at Buy with R$ 19 target

UBS BB initiated coverage of Bradsaúde with a Buy recommendation and a price target of R$ 19, implying a 36.98% upside compared to the previous close. The bank highlighted organic growth, rising dividend distributions, and the company's hospital joint venture Atlântica with Rede D'Or.

Analyst Olavo Arthuzo projects that Bradsaúde will increase its dividend payout from 40% in 2026 to 60% in 2027, 75% in 2028, and around 80% from 2029 onward. This implies an estimated dividend yield of approximately 7.5% in 2027. Arthuzo also expects the effective tax rate to drop from 32% in 2026 to 28% in 2027 and roughly 26% in the long term, while keeping the solvency ratio between 110% and 120%.

For 2027, UBS BB forecasts net earned premiums of R$ 61.9 billion, a financial result of R$ 4.09 billion, and net income of R$ 5.30 billion, which represents a 16% increase compared to 2026 estimates. In the second quarter of 2026, the financial result contributed roughly 8 percentage points to the return on average assets, compared to 4 percentage points from the underwriting result.

The Atlântica joint venture is expected to expand operational beds from about 2.3 thousand in 2026 to approximately 4.1 thousand, eventually accounting for 13% of Bradsaúde's consolidated net income over the long term. The price target is based on 2.6 times projected 2027 book value.