iShares MSCI Brazil ETF

Based on a comprehensive analysis, EWZ presents a compelling but high-risk opportunity for investors comfortable with emerging market volatility.

Technical Analysis: EWZ shows exceptionally strong bullish momentum, significantly outperforming the broader market. While it is approaching overbought levels after a substantial rally, the uptrend has been relatively stable with limited major pullbacks, indicating sustained buying pressure.

Valuation: The fund appears reasonably valued with a trailing P/E of 12.86, suggesting it is not overpriced based on current earnings. However, the lack of available fundamental data and peer comparisons makes a complete assessment challenging, adding an element of uncertainty.

Risk: The primary concern is high volatility, with a beta of 1.54 exposing investors to amplified market swings. It also carries significant country-specific risks related to the Brazilian economy, including political and currency fluctuations.

**Recommendation: CAUTIOUS BUY**

EWZ is suitable for aggressive investors seeking high-growth, high-beta exposure to a recovering Brazilian market. The strong technical momentum and reasonable valuation are positive, but the investment carries substantial risk. This should only represent a small, speculative portion of a well-diversified portfolio, and investors must be prepared for significant volatility.

*Note: This is not investment advice, for reference only.*

RockFlow Model Forecast: Three Scenarios for 2026

Based on a comprehensive analysis, here is a 12-month outlook for EWZ:

12-Month Outlook for EWZ

The 12-month outlook for EWZ is cautiously optimistic, driven primarily by strong technical momentum and Brazil's economic recovery, though it remains a high-volatility play. Key positive catalysts include continued global demand for Brazilian commodities and potential political stability under the current administration. The primary risks are significant and revolve around the volatile Brazilian Real, shifts in domestic fiscal policy, and broader emerging market sentiment, which could trigger sharp pullbacks. Given the absence of a specific analyst target and the fund's high beta of 1.54, a realistic target price range is broad, but a 10-15% upside from the current price of $37.81 is plausible if the bullish trend persists, putting the range approximately between $41.50 and $43.50.

Wall Street Consensus

Most Wall Street analysts are optimistic about iShares MSCI Brazil ETF's 12-month outlook, with consensus target around $38.61, indicating expected upside potential.

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

EWZ has demonstrated strong bullish momentum with substantial double-digit gains across multiple timeframes while significantly outperforming the broader market. The fund has delivered exceptional returns driven by robust strength in Brazilian equities, supported by both recent momentum and sustained intermediate-term performance. This represents a notable recovery from previous weakness given its substantial advance from the 52-week low.

Over the past one and three months, EWZ has posted impressive gains of approximately 14%, indicating consistent upward momentum without significant consolidation. The fund has strongly outperformed the market by over 13% during this period, reflecting its high beta characteristic of 1.54 which amplifies market movements. This substantial alpha generation highlights the fund's exceptional relative strength in the current environment.

Currently trading at $37.81, EWZ sits near the upper end of its 52-week range, approximately 4% below its recent high of $39.45. Having advanced significantly from its low, the fund appears to be approaching overbought territory given the magnitude of its recent rally. Despite this elevated positioning, the relatively modest maximum drawdown of -12.99% over the past year suggests the uptrend has been relatively stable with limited major pullbacks.

Based on the lack of available data, a fundamental analysis cannot be performed.

Investors should seek out EWZ's latest quarterly report and financial statements to obtain the necessary revenue, profitability, and balance sheet figures. Without this key data, any assessment of revenue growth, margins, or leverage ratios would be speculative.

A thorough analysis depends on the disclosure of audited financial results to evaluate the company's operational and financial standing effectively.

Valuation Level: With a trailing P/E ratio of 12.86, EWZ appears to be reasonably valued from a historical earnings perspective. This multiple is not excessively high and generally aligns with market averages for a broad-based ETF, suggesting the fund is not significantly overpriced based on current earnings.

Peer Comparison: A conclusive peer comparison cannot be performed as industry average data is unavailable. However, as an ETF tracking Brazilian equities, its valuation must be assessed in the context of the specific risks and growth prospects associated with the Brazilian market rather than a standard industry benchmark.

Volatility Risk: EWZ exhibits elevated volatility risk, with a Beta of 1.54 indicating it is 54% more volatile than the broader market. The 1-year maximum drawdown of -12.99% demonstrates moderate capital erosion potential during downturns, consistent with its high-beta emerging market profile.

Other Risks: Despite no reported short interest, which can reduce immediate downside pressure, the fund remains exposed to significant country-specific and liquidity risks inherent to its Brazilian market focus. These include political uncertainty, currency fluctuations, and potential for lower trading volumes.