What if… Lula finishes second in Brazil’s 2026 presidential first round

◇ Hypothetical scenario. What if… Lula finishes second in Brazil’s 2026 presidential first round? The analysis positions PBR, XP and SBS to benefit and SUZ, KOF and SID under pressure; confidence medium.

Hypothetical scenario — this analysis maps conditional exposure (“if this happens, who is exposed”). It is not graded against market prices unless the event occurs.

Analyzed 2026-09-25 — point-in-time, never revised. A hypothetical scenario is never graded.

Ranked exposures

  1. ▲ PBR Petrobras — impact +80 · confidence medium · horizon immediate · 1st order
    Deregulation increases Petrobras’s pricing freedom, lifting refining margins and supporting investment in new production.
    Chain: Lula trails in first round vote → market prices a policy shift toward liberalization → fuel pricing seen tracking import parity → Petrobras refining margins and dividends re-rate higher
    What would break the call: Lula wins the runoff and reaffirms subsidised pump pricing, restoring the refining margin discount.
  2. ▲ XP XP — impact +73 · confidence medium · horizon immediate · 2nd order
    Brazilian investment inflows increase XP’s assets under custody and trading activity, raising revenue per active client.
    Chain: market friendly election outcome lifts Brazilian asset prices → local investors rotate from deposits into equities → client assets under custody grow → XP take rate on higher balances rises
    What would break the call: Lula recovers and wins the runoff, sending Selic expectations higher and freezing retail equity inflows.
  3. ▲ SBS Sabesp — impact +72 · confidence low · horizon quarters · 2nd order
    Privatization momentum strengthens under a market-friendly front-runner, letting Sabesp cut operating costs and capture regulated tariff gains.
    Chain: first round result signals privatization friendly federal policy → state asset sale pipeline regains credibility → Sabesp efficiency plan and tariff cycle de-risk → discount rate on regulated cash flows falls
    What would break the call: Sao Paulo regulator delays the tariff review or reopens the concession contract terms.
  4. ▲ BBD Bradesco — impact +70 · confidence medium · horizon immediate · 2nd order
    Falling Brazilian rates revive Bradesco’s consumer lending and widen margins through lower retail credit provisions.
    Chain: fiscal optimism lowers Brazilian rate expectations → Selic path falls and credit demand recovers → retail loan book grows with lower delinquency → Bradesco net interest income and provisions improve
    What would break the call: Inflation surprises upward and the central bank holds Selic, keeping retail delinquency elevated.
  5. ▲ ITUB Itau — impact +65 · confidence high · horizon weeks · 2nd order
    Lower Brazilian risk premiums reduce Itaú’s funding spreads and expand credit demand, strengthening net interest income.
    Chain: country risk premium narrows after first round → wholesale funding spreads compress for large banks → credit demand from corporates recovers → Itau net interest income and fee revenue rise
    What would break the call: The runoff reverses the result and sovereign spreads widen back, halting corporate credit demand.
  6. ▲ BSBR Santander Brasil — impact +60 · confidence medium · horizon weeks · 2nd order
    Falling Brazilian rate expectations expand Santander Brasil’s loan demand as fiscal optimism supports borrowing and investment.
    Chain: market friendly signal lowers expected Selic path → borrowing costs fall for households and firms → Santander Brasil loan origination accelerates → margins widen as funding reprices faster
    What would break the call: Vehicle loan delinquency rises again, offsetting margin gains despite a lower policy rate.
  7. ▲ MELI MercadoLibre — impact +60 · confidence low · horizon weeks · 3rd order
    Online transaction fees rise at MercadoLibre after Brazilian economy expands under new policies.
    Chain: improved policy outlook lifts Brazilian consumer confidence → discretionary online spending volumes increase → MercadoLibre gross merchandise volume grows → commerce and fintech take rate revenue rises
    What would break the call: Brazilian consumption stalls and Mercado Credito loss rates rise, offsetting volume gains.
  8. ▼ SUZ Suzano — impact -59 · confidence high · horizon weeks · 2nd order
    A stronger Brazilian real compresses Suzano’s margins by reducing export reais while leaving Brazilian costs largely unchanged.
    Chain: election outcome attracts foreign portfolio inflows → Brazilian real appreciates against the dollar → dollar pulp revenue converts into fewer reais → Suzano cash cost per tonne rises in dollars
    What would break the call: Global pulp prices rally hard enough to offset currency translation on export realisations.
  9. ▲ NU Nubank — impact +58 · confidence high · horizon weeks · 2nd order
    Improved Brazilian confidence and funding conditions accelerate Nubank’s consumer credit growth and customer expansion.
    Chain: risk premium falls after first round result → funding costs decline for digital lenders → consumer confidence supports card and loan growth → Nubank net interest income after losses expands
    What would break the call: Brazilian card delinquency deteriorates, forcing Nubank to slow origination despite cheaper funding.
  10. ▲ STNE StoneCo — impact +58 · confidence medium · horizon weeks · 2nd order
    Lower Brazilian rates increase StoneCo’s payment volumes by supporting merchant sales and small business credit.
    Chain: rate expectations fall on fiscal optimism → merchant prepayment funding costs decline → small business sales and card volumes increase → StoneCo total payment volume and credit book grow
    What would break the call: Competitive repricing in acquiring passes the funding cost saving straight to merchants.
  11. ▲ PAGS PagSeguro — impact +58 · confidence low · horizon weeks · 2nd order
    PagSeguro processes more merchant payments when improving confidence supports consumer spending and small business transaction activity.
    Chain: improved outlook lifts consumer spending in Brazil → micro merchant card transaction volumes increase → PagSeguro prepayment funding costs fall with Selic → net take rate and banking revenue improve
    What would break the call: Price competition among acquirers compresses merchant discount rates faster than funding costs fall.
  12. ▲ ARCO Arcos Dorados — impact +55 · confidence low · horizon weeks · 2nd order
    Arcos Dorados runs McDonalds in Brazil, so stronger consumption and a firmer real lift dollar reported system sales.
    Chain: election result lifts Brazilian consumer confidence → restaurant traffic and average ticket improve → real appreciation raises dollar reported revenue → Arcos Dorados EBITDA and margin expand
    What would break the call: Brazilian beef and dairy cost inflation outpaces menu pricing, compressing restaurant margins.
  13. ▲ VIV Telefônica Brasil — impact +55 · confidence low · horizon immediate · 3rd order
    Telefônica Brasil gains valuation support as lower country risk reduces discount rates applied to stable domestic cash flows.
    Chain: country risk premium declines after the vote → local long rates and discount rates fall → stable telecom cash flows are valued higher → Vivo dividend yield re-rates toward lower rates
    What would break the call: Long end Brazilian yields rise on fiscal doubts, removing the discount rate support.
  14. ▼ KOF Femsa — impact -50 · confidence low · horizon quarters · 3rd order
    Femsa bottling operations see reduced volumes when government social initiatives face budget cuts.
    Chain: fiscal tightening expectations follow a market friendly result → social transfer budgets face consolidation pressure → low income beverage volumes soften in Brazil → Coca Cola Femsa Brazil volume and revenue decline
    What would break the call: Real appreciation and lower inflation lift disposable income, growing Brazilian unit case volumes instead.
  15. ▲ DE Deere — impact +50 · confidence low · horizon quarters · 3rd order
    Deere tractor sales to Brazilian farms accelerate due to favorable agricultural export policies.
    Chain: policy shift seen as favourable to agribusiness → Brazilian farm credit and export outlook improve → equipment replacement cycle reaccelerates → Deere Latin America sales volumes rise
    What would break the call: A stronger real cuts soybean farmer revenue in local terms, delaying equipment purchases.
  16. ▼ SID Companhia Siderurgica Nacional — impact -47 · confidence medium · horizon weeks · 2nd order
    A stronger Brazilian real cuts CSN’s export realizations by reducing the local value of dollar steel and iron ore sales.
    Chain: capital inflows strengthen the Brazilian real → dollar iron ore and steel sales convert to fewer reais → local mining and energy costs stay fixed → CSN EBITDA margin compresses on export volumes
    What would break the call: Domestic steel demand accelerates with lower rates, lifting volumes enough to offset currency drag.
  17. ▲ UGP Ultrapar — impact +45 · confidence low · horizon quarters · 2nd order
    Fuel price deregulation and stronger consumption lift Ipiranga fuel distribution volumes and margin per cubic metre.
    Chain: policy shift points to import parity fuel pricing → distributor margins stabilise with predictable pricing → economic recovery raises fuel demand volumes → Ultrapar Ipiranga EBITDA per cubic metre rises
    What would break the call: Fuel import competition intensifies and distributor margins per cubic metre compress anyway.
  18. ▲ ABEV Ambev — impact +43 · confidence medium · horizon weeks · 2nd order
    A stronger Brazilian real lowers Ambev’s dollar-priced input costs, widening beer margins.
    Chain: portfolio inflows push the real higher → dollar priced aluminium and barley cost less in reais → Ambev cost of goods per hectolitre falls → gross margin on Brazil beer expands
    What would break the call: Existing currency hedges delay the input cost benefit beyond the next several quarters.
  19. ▼ GGB Gerdau — impact -42 · confidence medium · horizon weeks · 2nd order
    A stronger Brazilian real makes Gerdau’s steel less competitive, pressuring domestic prices and mill utilization.
    Chain: real appreciates on election driven inflows → imported steel becomes cheaper in local currency → domestic mills lose pricing power to imports → Gerdau Brazil utilisation and spreads decline
    What would break the call: Government raises steel import tariffs or quotas, restoring domestic pricing power for Gerdau.
  20. ▼ VALE Vale — impact -41 · confidence medium · horizon weeks · 2nd order
    A stronger Brazilian real raises Vale’s local operating costs while reducing the reais translated from dollar iron ore revenue.
    Chain: Brazilian real strengthens after the first round → dollar iron ore revenue translates into fewer reais → reais denominated mining and labour costs rise in dollars → Vale C1 cash cost per tonne increases
    What would break the call: Iron ore prices rally on Chinese stimulus, overwhelming the currency driven cost increase.
  21. ▼ BAK Braskem — impact -40 · confidence low · horizon weeks · 2nd order
    Braskem prices resin against dollar benchmarks, so real appreciation narrows spreads over its largely local cost base.
    Chain: capital inflows strengthen the real → resin prices set by dollar international benchmarks → local conversion and labour costs rise in dollars → Braskem petrochemical spread narrows further
    What would break the call: Global petrochemical spreads recover on capacity closures, restoring Braskem margin regardless of currency.
  22. ▼ MCD McDonalds — impact -40 · confidence low · horizon weeks · 3rd order
    Cuts to consumer spending reduce McDonalds sales in Brazilian locations substantially after election.
    Chain: market friendly result implies fiscal consolidation → social transfer spending faces cuts → low income restaurant traffic in Brazil softens → McDonalds royalty revenue from Brazil declines
    What would break the call: Consumer confidence and a firmer real lift Brazilian restaurant traffic, raising system sales instead.
  23. ▼ ERO Ero Copper — impact -35 · confidence low · horizon quarters
    Ero Copper mines in Brazil with real-denominated wages and power, so currency strength raises unit cash costs.
  24. ▼ JBS JBS — impact -35 · confidence low · horizon quarters
    JBS matches dollar protein prices against Brazilian cattle and labor costs, so currency appreciation squeezes domestic unit profitability.

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Stocks in this scenario

PBR · XP · SBS · BBD · ITUB · BSBR · MELI · SUZ · NU · STNE · PAGS · ARCO · VIV · KOF · DE · SID · UGP · ABEV · GGB · VALE · BAK · MCD · ERO · JBS · NKE

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