EWZ

Of course. Here is a comprehensive analysis of whether EWZ is worth buying.

Technical Analysis EWZ exhibits strong bullish momentum, significantly outperforming the broader market over the past three months. While a minor pullback is occurring, the ETF remains near its 52-week high, confirming a solid uptrend. The primary technical consideration is its high volatility (Beta of 1.37), which suggests the potential for larger swings but aligns with a strong growth trajectory.

Fundamental Analysis As an ETF tracking Brazilian equities, EWZ's fundamentals are an aggregate of its holdings. The Brazilian market is heavily weighted toward commodities and financials, tying its performance to global economic cycles and local interest rates. Key strengths include exposure to a resource-rich economy, but investors must be aware of inherent geopolitical and currency risks associated with an emerging market.

Valuation The valuation metrics are compelling. A trailing P/E ratio of 11.33 is modest, and a price-to-book ratio below 1.0 indicates the fund is trading at a discount to its net asset value. This suggests EWZ is fundamentally undervalued relative to its current earnings and book value, presenting a potential value opportunity for investors comfortable with the risk profile.

Investment Recommendation Based on the analysis, a buy recommendation is supported. EWZ demonstrates strong momentum, appears undervalued on key metrics, and offers diversification into a major emerging market. However, this opportunity comes with higher volatility and exposure to country-specific risks. Investors should consider it a strategic, growth-oriented portion of a diversified portfolio.

*This analysis is for informational purposes only and does not constitute investment advice. Please consult with a qualified financial advisor before making any investment decisions.*

RockFlow Model Forecast: Three Scenarios for 2026

Based on the provided analysis, here is a 12-month outlook for EWZ (iShares MSCI Brazil ETF):

12-Month Outlook for EWZ

The 12-month outlook for EWZ is cautiously optimistic, driven by its attractive valuation and momentum, but remains highly contingent on the macroeconomic environment. Key upside catalysts include sustained high commodity prices, which benefit Brazil's resource-heavy index, and potential for continued momentum if the current bullish trend holds. However, significant risks persist, primarily from the country's inherent geopolitical uncertainty, currency volatility (Brazilian Real vs. US Dollar), and sensitivity to shifts in global interest rates, which could trigger the high volatility noted in its profile. Given the compelling valuation metrics (P/E of 11.33, P/B below 1.0) and strong recent performance, a reasonable target price range for the next year could be $36 - $42, implying a potential upside of 10-30% from the current price, though this is speculative without specific analyst targets.

Wall Street Consensus

Most Wall Street analysts are optimistic about EWZ's 12-month outlook, with consensus target around $33.16, indicating expected upside potential.

Overall, EWZ has investment potential but also faces challenges. Here are key factors to weigh before investing.

EWZ has delivered strong outperformance over the past three months despite a recent minor pullback. The ETF remains positioned closer to its 52-week high, reflecting sustained bullish momentum.

Over the short term, EWZ has experienced a slight decline of 1.6% in the past month, but this is overshadowed by a robust three-month gain of nearly 10%. This performance has significantly outperformed the broader market by 6.61% over the same period, highlighting its relative strength despite its higher beta of 1.37 indicating elevated volatility.

Currently trading at $32.63, EWZ is positioned in the upper quartile of its 52-week range ($22.79 - $34.80), approximately 6% below its peak. While not at an extreme overbought level, its proximity to the high and a maximum drawdown of only -12.99% over the past year suggests the ETF is in a strong uptrend but may be susceptible to near-term consolidation.

Without access to the recent quarterly report and financial ratios, a concrete fundamental analysis of EWZ cannot be provided. EWZ is an exchange-traded fund (ETF) that tracks the Brazilian stock market, not a single company, so its fundamentals are an aggregate of its underlying holdings.

Analysis would require details on the fund's portfolio composition, including the collective revenue growth and profitability of the Brazilian companies it holds. Similarly, its financial health is a reflection of the cumulative debt levels and cash flows across its diverse investments.

Operational efficiency metrics like aggregate ROE and asset turnover for the portfolio are also essential but unavailable. A proper assessment necessitates reviewing the fund's fact sheet and the latest financial data from its major holdings.

Based on the available metrics, EWZ appears fundamentally undervalued. The TTM P/E ratio of 11.33 is modest for an equity market, suggesting investors are paying a reasonable price for current earnings. More notably, the price-to-book ratio of approximately 0.89 indicates the stock is trading below its net asset value, which is a classic sign of potential undervaluation.

A formal peer comparison cannot be conducted due to the unavailability of industry average data. However, the sub-1.0 P/B ratio is typically considered a value indicator across most market sectors. In the absence of comparative data, the conclusion of undervaluation is based solely on the stock's absolute valuation levels.

The stock carries elevated volatility risk, as evidenced by its Beta of 1.37, indicating it is 37% more volatile than the broader market. This heightened sensitivity to market swings is further illustrated by a maximum one-year drawdown of -12.99%, suggesting the potential for significant capital erosion during downturns.

Regarding other risks, a notable positive is the absence of significant short interest, which reduces the threat of a short squeeze or overly bearish sentiment. However, investors should perform additional due diligence on factors like country-specific political and economic risks, liquidity, and currency fluctuations, which are inherent to a single-country emerging market ETF like EWZ.