As Brazil’s third-quarter earnings season comes to a close, companies left a clear message: the worst of the monetary squeeze appears to be behind them — but the crossing is far from over. Results reinforced the sense that 2026 may usher in a moderately more benign cycle, with the first consistent rate cuts expected early in the year despite the noise of an election calendar. This is not euphoria; it is the cautious return of a normality that looked improbable two years ago.
The sectors most exposed to the global market remain the harshest barometers. Steel and petrochemicals are stuck in a grey corridor: CSN, Gerdau and Usiminas face compressed margins, excessive Chinese supply, weak demand and the return of U.S. tariffs — now coupled with Brazil’s own promise of safeguard measures against cheap imports. Braskem remains trapped in the worst petrochemical cycle in decades, with structural improvement visible only toward the end of the decade. Protein producers — JBS, MBRF and Minerva — also contend with tight spreads, but see 2026 as the beginning of a global rebalancing, particularly as U.S. cattle supply recovers. Oil and mining remain dominated by volatility and geopolitics: Petrobras and Prio strive for discipline in the face of erratic prices, while Vale and CSN Mineração swing according to the decisions — and hesitations — coming from China.
Energy is where monetary relief finds the most fertile ground. The entire power sector is working with the rare notion of a more predictable 2026 — in a country where demand, tariffs and regulation often fall out of sync. Transmission and distribution players such as Taesa, ISA, Equatorial, CPFL and Neonergia see more reasonable conditions to finance expansion, reinforce networks and revive projects previously blocked by the cost of capital. In sanitation, Sabesp and Aegea navigate between discipline, resilience and growing pressure on water and sewage systems.
Healthcare is also reorganizing after an expensive cycle. Hapvida is trying to recover from the loss of investor confidence; Fleury and Rede D’Or focus on efficiency, integration and higher-value services; and RD Saúde leans increasingly on high-cost medication and high-frequency clinical services. It is a sector where the cost of capital matters almost as much as patient behavior. Lower rates will not fix structural imbalances, but they do reopen space for investment and operational repair.
Homebuilders feel the shift immediately. MRV, Cury and other mid-income players benefit from a friendlier curve, less painful mortgage pass-throughs and credit conditions eased further by the federal housing program. Shopping mall operators such as Multiplan and Iguatemi continue to post real sales growth, high occupancy and a consumer base — upper-middle income — that remains surprisingly resilient. It is a rare combination in a retail landscape still divided between those who can spend and those merely trying to stay afloat.
In retail and consumption, lower rates present an opportunity — but hardly a cure. Magalu, Renner and Casas Bahia remain fixated on cash generation, logistics and operational discipline, squeezed by the relentless pressure of e-commerce. The “old economy” of physical retail confronts, daily, the efficiency standards defined by Mercado Livre, whose scale and speed are difficult to match even in benign cycles. Lower rates may ease working capital, but they do not dismantle a digital ecosystem that keeps strengthening. Telecom and corporate tech complete the picture: TIM and Vivo continue to monetize 5G and fiber with high ARPU, while a softer curve lightens the burden of years of network investment.
The next cycle may be gentler, but not simpler. Lower rates buy time, not competence. They will not fix the global petrochemical glut, China’s structural advantage in steel, commodity volatility, chronic fuel-market informality, e-commerce hyper-competition, regulatory risks in energy or the persistent indebtedness of Brazilian households. Monetary relief is, as always, a useful ally — never a miracle.
Who Surprised — and Who Disappointed — in the 3Q25 Season
Top 3 Positive Surprises
BTG Pactual — record revenue, broad-based traction, flawless execution.
Rede D’Or — operational efficiency, solid integration and resilient margins in a sector historically squeezed by rising costs.
C&A — a much faster-than-expected turnaround, strong margins, cash generation and deleveraging.
Top 3 Disappointments
Hapvida — weak quarter, elevated medical loss ratio, defensive tone and a credibility setback.
Braskem — severe petrochemical cycle, depressed spreads, no short-term relief in sight.
Casas Bahia — slow restructuring, fragile margins, pressured cash flow and a model still under strain.
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