ITUB reports on September 2 with short sellers meaningfully pulling back from the stock — the clearest positioning story heading into the print.
The retreat in bearish positioning is striking in scale. Short interest has fallen 43% over the past month, dropping to around 12.7 million shares, after peaking near 25 million in late July. That unwind has come alongside borrow conditions loosening sharply: the cost to borrow collapsed 58% in the past week alone to just 0.18%, and share availability remains essentially unlimited relative to the size of any short position. There is no squeeze pressure here — this is orderly short covering ahead of results. The ORTEX short score of 25.9 sits at its lowest reading of the past two weeks, reinforcing the direction of travel.
Options traders are leaning more defensive than their own recent history would suggest, though not dramatically so. The put/call ratio of 1.49 runs modestly above its 20-day average of 1.39 — less than half a standard deviation above the mean — and well below the 52-week high of 6.0. That reading reflects mild caution rather than outright fear, and the PCR has been elevated consistently since mid-August, suggesting the options market has been slowly pricing in downside protection rather than reacting to any single catalyst. The stock itself is down 9.7% over the past month to $7.50, even with a small recovery over the past week, giving bears a recent fundamental reason to hedge.
The bull-bear debate on Itaú is squarely about macro rather than company execution. JP Morgan lifted its price target to $10.00 in early July while maintaining an Overweight rating — implying roughly 33% upside from the current price — and has raised its target three consecutive times since late 2025. That directional confidence contrasts with the stock's recent pressure, which has been driven by broader EM headwinds and rate sensitivity rather than any deterioration in Itaú's underlying credit quality. ORTEX factor scores place the dividend yield in the 97th percentile, making the stock a clear income anchor for institutional holders, several of whom added shares in Q2: Capital Research increased its stake by 11.5 million shares and Orbis added 12 million, both reported as of July. The quality anchor is genuine — an f-score of 6 and an ROA of 1.58 underpin the bullish case — while EPS momentum scores in the bottom third of the universe reflect the near-term earnings uncertainty that the bears anchor on.
The September 2 print will test whether Itaú's credit quality and margin profile can withstand Brazil's current macro environment at a level convincing enough to validate the multiple re-rating that JP Morgan has been pricing in across three successive target raises.
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