Ibovespa started November in ecstasy. On Monday, November 3^rd, the main B3 index reached new daily and closing records by surpassing 150,000 points. The index reaches a high of over 25% in 2025 and already surpasses 21-year closing records.

But did the Brazilian stocks now, in the heights of their punctuation, become too expensive? Market agents say no. There is still space for valuing, and stocks are still cheap, they affirm.

To measure whether the index is valuing, analysts examine the price-to-earnings (P/E) ratio, which indicates how many times the stock price is worth the yearly earnings of the indexed companies.

According to Bloomberg data compiled by Nord Investments, by EXAME’S request, current Ibovespa P/E is of 10,3 times, which is below the historic average of 13,92 times of the last 10 years. For comparison, the number was of 38,86 times in 2020, 7,21 times in 2021, 5,76 times in 2022, 9,46 times in 2023 and 9,08 times in 2024, according to the consultancy.

“The truth is that despite this high, there is still space for valuing, especially if some triggers are confirmed, such as, for instance, a stronger drop in Brazil’s real interest rates and advancements in the fiscal agenda”, affirms Fábio Murad, economist and CEO of Super-ETF Educação.

“The stock market keeps dealing with numbers below the historic average and some sectors like banks and energy are still being considered as discounted by the board”, says the analyst.

Brazilian stocks are also cheap in relation to emerging pairs

Compared to other emerging markets, Brazil is the second-cheapest, only behind Turkey, according to a Nest Asset Management survey.

While Brazil and Turkey deal close to 10 times future profits, Mexico, Argentina and China are closer to 15 times, and Australia and India are over 20 times. This means that, in relation to global pairs, the investor still finds opportunities in the Brazilian stocks, and there is value potential if international markets keep positive.

In dollars, Ibovespa has increased 40,24% this year, above the 33,63% emerging market average. According to Luis Castro da Fonseca, founding fellow of Nest Asset, future development will depend on the international scenario, which is already not that cheap.

“Looking at this year’s end, we believe that Brazil should continue following the trend of global markets and particularly of emerging ones. If these markets keep on the good performance, so should Brazil. Markets abroad aren’t super expensive however, so its not so big a certainty that they will keep on doing well in this last quarter”, evaluates Fonseca.

According to the manager, what is working in favor of Ibovespa is that, historically, the last quarter of the year has received positive feedback in the global market. “If you look at S&P 500, in the last 10 years, the only time in which the third quarter was negative was in 2018”, he remembers.

Where can the stocks go?

Ibovespa’s performance has also been reigniting an old expectation among investors of the famous “end-of-year rally”. Traditional in the markets, the high tendency, which usually ends the calendar with earnings, was absent in 2024, but is now back on the radar with a new stage of stock optimism.

“Stocks could easily climb more, something like 10-20% in dollars, without becoming expensive. It is difficult to predict if this would happen by year's end or by early next year, but if the global scenario remains positive, this movement might happen”, says Fonseca.

Analysts are not of a unanimous opinion about the strength of an eventual surge between November and December, but there are those who estimate that indexes will finish 2025 in the line of 155 thousand to 150 thousand points.